The FCA has issued a press release today revealing:
• ‘Clone’ scammers pretending to be legitimate firms stole £78 million from unsuspecting victims in 2020 according to Action Fraud data
• Reports of clone firms increased 29% in April 2020 compared to March as fraudsters looked to take advantage of uncertainty created by the pandemic
• Consumers report average losses to clone scams of more than £45,000 each
• Risk to savers of being duped by criminals likely to increase as financial vulnerability rises
o Four-in-ten (42%) investors say they are worried about their finances because of the pandemic
o Over three-quarters (77%) plan to make an investment within the next six months to help improve their financial situation
Tom Selby, senior analyst at AJ Bell:
“It is sadly no surprise mendacious fraudsters have ramped up attempts to swindle hard-working people out of their savings during this pandemic.
“Cloning appears to be an increasingly popular tactic among scammers. The appeal of this model to fraudsters is obvious – regulated firms and particularly well-known brands are trusted by their customers, which will likely mean potential victims are less wary when dealing with someone pretending to be that firm.
“Scammers hiding under this cloak of legitimacy stole £78 million from people in 2020, and with Coronavirus and the national lockdown heaping uncertainty on the lives of millions of people this heightened activity will inevitably continue through 2021.
“While important work has been done by the Government, regulators and the pensions industry to tackle fraud, it is ultimately down to individuals to be vigilant and protect themselves from financial disaster.
“That means familiarising yourself with the tell-tale signs of fraud, rejecting any investment offers made out of the blue, only dealing with legitimate, bona fide organisations, checking to make sure the firm you are in contact with are who they claim to be, and ideally seeking regulated advice.
“The golden rule should be that, if you are in any doubt about whether or not the firm you are dealing with is legitimate, do not part with your hard-earned savings.”
Where can savers go for information on scams?
The FCA’s ScamSmart website, www.fca.org.uk/scamsmart, gives consumers tips on how to spot the techniques used by fraudsters and hosts the FCA Warning List.
The Warning List is a list of firms and individuals that the FCA knows are operating without its authorisation. The web tool helps members of the public search this list, find out more about the risks associated with an investment or pension opportunity and the steps they can take to avoid scams.
You can also call the FCA consumer helpline here for further information: 0800 111 6768.
In addition, the Government-backed Pension Wise service provides lots of information on people’s retirement options: https://www.pensionwise.gov.uk/en.
Pension Wise also have a specific section of their website on avoiding scams here: https://www.pensionwise.gov.uk/en/scams
