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Savings & Investment Fraud in 2022 – Things To Look Out For & Check

People are always looking to get a better return on their savings or investments which maybe held in a Bank or Savings Account on low rates of interest. Scammers have become wise to this and have been advertising some very appealing rates, for instance a rate of 7% from a fully regulated low risk ISA, or invest £15,000 in stocks and shares and in a few months time this will be worth £26,000, if it seems to good to be true, it usually is!

Firstly, fraudsters will set up fake websites offering high returns for investments are amongst the “clone scams” which are increasingly catching people out. Or another fake site maybe set up by fraudsters who use marketing material and websites to mirror genuine companies.

It’s a very appealing fraud for criminals. Last year Action Fraud www.actionfraud.police.uk reported that victims collectively lost £78 Million an average of £45,000 per person. This maybe just the tip of the Iceberg as a lot of these crimes go unreported as people realise they have been duped out of their cash and are too embarrassed to report it to the Police.

The Financial Conduct Authority (FCA) www.fca.org.uk reported that the number of cloned companies under investigation went up by 29% lastly year from March to April 2021 when the UK went into its first lockdown, as Fraudsters tried to take advantage of peoples circumstances during the pandemic. Constantly low interest rates on savings accounts were also a factor for people considering other ways to get a better return on investing their cash. The FCA reported that 77% of people were unsure or did not know what a clone investment company was.

Small Differences

Fraudsters will often blend the details of a legitimate company with fake ones. This might include the postal address of the actual legitimate company on their websites or email signature but then have a slightly different brand name.

In October last year the FCA issued a warning about Allianz Private Investors www.fca.org.uk/news/warnings/allianz-global-investors-clone-eea-authorised-firm which was copying the fully regulated company Allianz Global Investors, the fraudsters even claimed to have the same postal address in London.

Check the companies URL

The next step for any would be investor is to check all the information on the FCA register www.register.fca.org.uk/s/ This will allow you to find out the phone number of the legitimate company and it’s website address. You can then call the number and check the website matches any information you might have received. When you call you need to speak to someone to confirm that you are dealing with the company. If the legitimate company has no record of dealing with you, then you must flag the clone firm to the FCA and also Action Fraud to prevent others falling victim to the fraud.

Check the FCA’s warning List

Fraudsters will clone companies using very similar names or even the same name as a legitimate business. For instance a clone company called Aberdeen Standard Investments, was claiming it was the asset management side of Standard Life in Aberdeen. Before you even think about investing any money in the company you should check the FCA’s warning list www.fca.org.uk/scamsmart/warning-list You can use the register to search for companies. It also tells you that you maybe dealing with a company that is known to be operating without permission or running scams if this has been previously reported to them. The register is updated on a daily basis by the FCA.

In 2021 the FCA issued alerts about over 1100 companies including cloned ones, more than double the number in 2019. Investors need to also consider if a company is not on the FCA’s list it could still be fraudulent as it may not have been reported yet.

Checking the firms reference number with the FCA may not be enough

As we have mentioned companies authorised by the FCA will have a firm reference number (FRN). Fraudsters will often copy this number and use it on emails and their fake or cloned websites to try and make them appear genuine. They will then encourage victims to check the number is on the register to prove that the company is legit. The FCA have warned investors that checking the register is not enough.

FCA Helpline

If you are still unsure about investing you can call the FCA’s helpline free for guidance and advice on 0800 111 6768.

Be vigilant & Remember

You must follow all the points raised in this blog if you are considering an investment. One check alone may not be enough to help you spot a fraud, don’t get caught out which could cost you a vast amount of money which you may have been saving up for a long period of time and never see again.