Alarm bell sounded as impersonation scams jump 600%

Alarm bell sounded as impersonation scams jump 600%

Alarm bells have been sounded after it emerged the number of investment scams impersonating a regulated financial services firm increased by more than 600 per cent over the past decade.  

Analysis from Quilter showed the number of clone firm warnings issued by the Financial Conduct Authority hit a high of 453 last year, up from just 62 in 2010. 

The advice giant warned impersonation scams now accounted for 37 per cent of all warnings issued by the regulator over the past ten years. 

As one of the biggest advisers in the UK, Quilter has itself fallen victim to scammers attempting to clone its brand in a bid to entice victims with fake investment products online. 

This, the advice giant said, had predominately occurred through paid adverts accessed through internet search engines.

Matt Burton, chief risk officer at Quilter, said: "The internet is awash with fake investment scams promoted on search engines and social media platforms that purport to offer high returns with limited risk, many featuring the brands of well-known financial services firms.

"We are determined to do as much as we can to reduce the risk to consumers by making it easier to verify an investment proposition that uses our branding online."

'Cloned' firm warnings issued by the FCA over the last decade 

Source: Quilter

Quilter has this week launched its own scam reporting tool which it has urged consumers to use if they are unsure of an investment opportunity found online which claims to use any of the company's brands. 

Mr Burton said: "They can report it directly to our financial crime team who will be able to verify the investment proposition, or offer guidance on actions to take to recovery any money lost and avoid a follow-up scam.

"We have seen impersonation scams skyrocket in the past few years, and so we continue to urge the government to establish a legally binding framework that prevents fake websites and ads promoting investment products from appearing online." 

Quilter was among those in the industry calling on the government last month to hold search engines and social media sites accountable for scams and other financial threats which appear on their sites. 

Campaigners warned omitting responsibility for financial harms under the long-awaited Online Safety Bill would be a "mistake" which failed to bring internet regulation "into the 21st century". 

Tom Selby, financial analyst at AJ Bell, warned it was "no surprise" fraudsters were increasingly looking to impersonate regulated firms in ongoing attempts to swindle people out of life savings.

Mr Selby said: "The appeal of this model to scammers 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.

"Sadly this sort of activity is only likely to increase as a result of coronavirus as millions of people face huge financial uncertainty and become increasingly vulnerable.