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Cloned companies on the rise

Advisory firms are now falling victim to cloning scams run by unauthorised and unregulated companies, with deVere UK reporting a new wave of impersonations to the FCA.

But there is a limit to how much the regulator can do to tackle the issue.

On the provider side, Skandia is among the latest companies to find itself mimicked by imitation firms. Clone firm Skandia Invest is operating out of a Birmingham address and is using the name of Skandia Invest SA, which is a genuine and regulated Luxembourg-based company owned by Old Mutual Wealth.

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Hot on its heels, another company – this time advisory – deVere UK is reporting to the FCA to highlight what it terms an “alarming number” of individuals who have been contacted by an unregulated firm purporting to be genuine. DeVere has noticed an increase in the number of occurrences over the past two years.

“It used to be a copy-and-paste job off our website but they weren’t using the right FCA number or Companies House number, but now they are,” said Kevin White, head of UK financial planning at deVere.

He said that the victims and potential victims all fitted roughly the same profile of 65 to 70 years old, who have held stocks and shares at some point, and receive a cold call to a home telephone number.

An FCA spokesperson said it is seeing more and more cloned firms, and while it does try to spot them, it is often consumers who come to the regulator saying a firm looks suspicious.

One of the main problems when a suspect firm is reported is that they are rarely based in the UK. This means the FCA has no power whatsoever over the companies in question and relies on domestic regulators taking reports on board.

In terms of what the FCA can do to combat cloning, it believes prevention is better than a cure. “It’s all very well arresting people and smashing down doors but for that to take place there has to be victims, and we’d rather there were no victims,” said the spokesperson.

The advice the regulator dispenses to consumers includes checking the FCA register, making checks on the company’s website and with Companies House, but in light of deVere’s trouble this advice may not go far enough.