Hampshire residents lose £16m to 'clone firm' investment scams
The number of fraudsters pretending to be legitimate businesses has increased across the UK
Last updated 29th Jan 2021
Nationally reports of 'clone firm' investment scams increased by 29% in April 2020 compared to March, when the UK went into its first lockdown.
Hampshire Constabulary is working with Action Fraud, the City of London Police and the Financial Conduct Authority (FCA) to raise awareness of the crime
WHAT IS A CLONE FIRM INVESTMENT SCAM?
Scammers set up clone firms using the name, address and firm reference number (FRN) of real companies authorised by the FCA.
They then send out sales materials on social media platforms linking to the websites of legitimate firms tricking potential investors into believing they are dealing with a real firm.
Victims end up transferring their savings and often don't realise they are being scammed until many months later when they fail to receive quarterly returns or investment reports.
IMPACT ON HAMPSHIRE RESIDENTS
Data from Action Fraud shows Hampshire residents recorded losses of more than £16.1 million between January-December 2020, with victims losing £31,9441 each on average
Those most likely to become victims of investment fraud in the county were aged 70-79 (19%), closely followed by those aged 50-59 (16%).
61% percent of victims in Hampshire were men.
Detective Sergeant Marcus Mills, from Hampshire Constabulary's Economic Crime Unit, said:
"We are aware that more and more people are spending time at home, and online, due to the ongoing global pandemic. This unfortunately leaves people vulnerable to acts of fraud - and specifically investment fraud on this occasion. Hampshire, like many other areas, seemingly saw a spike in activity during the summer months last year and this has continued, albeit rates have slightly dropped in recent months.
"It's important to remind local residents of that age old saying that if something is too good to be true, it likely is. Fraudsters will use very sophisticated mechanisms - such as cloning official investment websites or spoofing email address to make you feel as if the investment is genuine. They are often incredibly charming and reassuring in their approach, using lots of expert financial literacy - yet the stark reality is that the scams are being run by organised crime groups."
WHAT ABOUT WILTSHIRE?
We're told the county's police dealt with 189 reports of fraud across Wiltshire between January and December 2020.
A total of £4.3 million was reported to have been lost - that's an average loss of £22,750 per victim.
Wiltshire Police Fraud Manager, Alison Wiles said:
“Clone investment scams are particularly difficult to spot at first, fraudsters work hard to make them look incredibly convincing. But by following the advice to check the FCA’s Warning List and Register, it’s easy to double check you’re dealing with a legitimate, authorised firm. The cost of not doing so could be huge.
“Even savvy investors have been convinced by sophisticated looking scams so please do double, triple check before parting with your money. It can be tempting if an investment opportunity looks like a good chance to boost your savings, pension or income, but be vigilant and take extra care. Fraudsters will feel no remorse capitalising on people’s additional financial worry - they will not only set up fake websites or place adverts on social media but use email, text and phone calls to target their next victim.”
CORONAVIRUS PANDEMIC LEADING TO SPIKE IN CASES
The ongoing financial impact of coronavirus may also make people more susceptible to these type of clone scams.
Superintendent Sanjay Andersen, from the City of London Police's National Fraud Intelligence Bureau, said:
"The coronavirus pandemic has caused many people to feel financial worry and uncertainty - something which criminals will feel no remorse about capitalising on. We have sadly seen an increase in the number of investment fraud reports in 2020, compared to the previous year, with a spike in reports in the summer, after the first national lockdown was lifted."
HOW TO PROTECT YOURSELF
Checking the company's Firm Reference Number (FRN), checking this alone isn't enough. Criminals carrying out 'clone firm' investment scams will often copy FRN numbers and encourage victims to check the number on the FCA Register to prove their legitimacy.
Anyone considering an investment opportunity should double-check all the details of a firm, not just the FRN, on the FCA register. This includes the telephone number and it is important you only use the number on the FCA Register to make contact with the firm.
Top tips to remember:
- 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 www.fca.org.uk/scamsmart to find out more.
If you think you've fallen victim to an investment fraud, report it to Action Fraud as soon as possible online at www.actionfraud.police.uk or by calling 0300 123 2040.