‘Clone firm’ investment fraud warning after over £78 million stolen nationally
Bedfordshire Police is supporting a national campaign against ‘clone firm’ investment fraud which is being led by the Financial Conduct Authority (FCA).
The campaign is focusing on the increasing threat of this type of fraud. Which has risen by 29% after the first lockdown announcement in March 2020.
Bedfordshire Police, on average, receives three to four notifications of investments fraud a week, with victims reporting losses between a couple of thousands of pounds to over £150,000, with an average loss of £80,000.
Often the victims end up losing their entire life savings or even take out loans in the hope of a large return on their investment.
Sean O’Neil, Bedfordshire Police’s cyber security advisor, said:
“Our force is supporting the national campaign which brings together police forces and specialised agencies dealing with economic fraud.
“If you are planning to invest money, no matter the amount, always complete your due diligence. Seek advice from third party and run appropriate checks on the FCA website.
“Don’t feel pressured to invest by promises of quick returns. The fraudsters are experienced and skilful in misinformation and manipulation. They sound very convincing and knowledgeable and often push the victim to invest more money or even take out loans.
“Always remain sceptical and critically think about the offer. If it sounds too good to be true, it probably is.”
The fraud usually starts when a person looks up legitimate companies to invest in
Investment fraud is an extremely sophisticated fraud which is not easy to for an inexperienced person to spot.
The fraud usually starts when a person looks up legitimate companies online to invest in. They then put their contact details into an exact replica of a legitimate website.
At this point a potential fraudster gets involved. The criminal uses the details to cold call the person and pose as an employee of a legitimate company which deals with financial investments. The victim is referred to an investment website and downloads fraudulent software.
Software provided by the fraudsters initially projects better than market rate investment returns, which prompts the victim to invest more and more money. After couple of months the software projections drop dramatically and when the victim attempts to recover their funds they are told there are additional fines and admin charges.
By this point all the money has been transferred to accounts abroad with no way of recovering the it.
To protect yourself from becoming a victim of this type of fraud, the following advice shows how you can protect yourself from clone investment firms:
- Reject unsolicited investment offers whether made online, on social media or over the phone. Be wary even if you initiated contact
- Always check the FCA Register to make sure you’re dealing with an authorised firm and check the FCA Warning List of firms to avoid
- Only use the telephone number and email address on the FCA Register, not the contact details the firm gives you and look out for subtle differences
- Consider seeking impartial advice before investing
Investors can test if they can spot an investment scam from a smart investment by taking the Scam or Smart quiz. Visit Scam Smart to find out more.
You can report fraud or cybercrime to Action Fraud at any time using its online reporting tool.