Regulation  

FCA data reveals rise in clone companies reported

October was the worst month of the year so far for both reports of cloned companies and the number of companies reports related to, according to data from the FCA.

After starting the year at 22 in January, the number of reports rose to 33 in October, more than double that of September’s 15.

Fraudsters across the globe are using authorised financial services companies’ information, including FCA numbers and company registration numbers, to pose as them in scams to trick investors into handing over large sums of money.

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This year, large financial services firms such as Société Générale and Axa have fallen victim to such schemes. More recently, Skandia and financial advisory firm deVere have both faced similar issues.

The figures come alongside an increase in scammers using the names of individuals to pose as authorised persons.

The FCA has issued warnings against companies targeting customers in the UK operating from countries such as the US, Gibraltar and Switzerland.

Investors who do business with firms not authorised by the FCA have no recourse to the Financial Ombudsman Service (Fos) or the Financial Services Compensation Scheme (FSCS). This is further complicated by the fact that where the clone firm is operating abroad, the FCA has no power to stop them and instead relies on domestic regulators seeing it as a priority and taking action.

Alongside warnings over cloned firms and individuals, the FCA is also issuing a number of warnings each week on unauthorised firms that are not ‘clones’ but which could be targeting UK consumers with what appear to be fully authorised services.

In two such cases recently, the firms in question even gave a six digit FCA reference number and a link to a fake version of the FCA register which appeared to confirm both were fully authorised and regulated.

Number of reports to the FCA of cloned companies
JanFebMarAprMayJunJulAugSepOct
Reports22292923292720331533
Number of companies reports relate to279105648610
Source: FCA. Copyright: Money Management.