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Clone companies becoming more sophisticated

The practice of company cloning is growing and evolving, according to one of the latest victims of such practices, deVere UK. The FCA has echoed this sentiment, with a spokesperson acknowledging it is seeing “more and more” cloned firms, but its guidelines on how consumers should protect themselves fall down in the face of the newer, more brazen and sophisticated kinds of cloning.

Kevin White, head of UK financial planning at deVere says it is a “growing threat”. DeVere has reported occurrences of the company being cloned by unauthorised and unregulated firms to the FCA, but says there is little the cloned companies can do in these instances.

“We even had a client of ours contacted this morning by a clone company,” Mr White says, adding that rogue firms are getting more sophisticated in their methods. DeVere has experienced sporadic events of this nature over the past two years, leading up to its most recent incident which was also the most advanced and least transparent.

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In previous occurrences, fraudsters would copy information and logos from the deVere website, but on this occasion ‘agents’ from the fake firm were impersonating actual deVere employees – including Mr White himself.

All the victims fell into a fairly similar profile of being retirees of 65 to 70 years of age who at some point in their lives had held stocks and shares, which could suggest the criminals are taking information from a stockholder register. The method used in this case was to cold-call the victims on their home telephone number.

A problem arises in the FCA’s guidance on the subject of suspicious firms, which advises clients to check their register for the company, and to verify the company’s registration number. If a firm is presenting a carbon-copy of a legitimate, authorised and regulated company then the only indication that it could be suspicious is if a client is cold-called and takes the initiative to cross-reference with directory enquiries or Companies House.