Action Fraud is warning that £36million has been lost to investment fraud through cloned company fraud in 2021. The scam watchdog’s research found that a third (34 percent) of those between the ages of 55 and 70 were targeted by criminals in the first half of the year. Average losses in savings and investments came to around £39,218 per victim, according to Action Fraud.
This particular scam involves criminals replicating or “cloning” by using the name and identifiable information of a company online to trick unsuspecting investors.
Once a fake website is fully operational, fraudsters lure potential customers onto their site with offers of favourable investments and money-making opportunities.
Those who were targeted by the scam explained how they were asked to fill out a form on the website which asked for their personal details.
Scammers then asked their victims to invest their money in non-existent bonds resulting in significant financial losses.
Craig Mullish, a Temporary Detective from the City of London Police, discussed how ‘closed’ scams tend to work and how people can prevent themselves from falling into them.
Detective Mullish said: “Every year, victims lose thousands of pounds to criminals imitating genuine investment firms with some even losing their life savings.
“This trend of ‘cloned companies’ is particularly worrying as it makes it even harder for people to spot a fraudulent investment opportunity.
“Investing any amount of money comes with an element of risk so always remember to stop and think as it could protect you and your money.
“It’s really important people take time to do their research and seek independent impartial advice before making an investment.”
Experts at the National Economic Crime Centre (NECC) are working alongside the police to educate the public on how scams operate, as well as how savings and investments can be protected.
This advice includes saying no to unsolicited investment offers, using the Financial Conduct Authority’s (FCA) Register to check the validity of the firm and seeking impartial advice on how to manage savings.
Jon Shiland, the NECC’s fraud lead, issued a warning that experienced investors are also at risk of becoming victims to this particular type of fraud.
Mr Shilland explained: “Even tech-savvy and seasoned investors can be vulnerable, given that many of the adverts for them appear on or through well-known and trusted websites.
“Everyone should be highly alert and take caution before parting with any amount of money online.
“If it looks too good to be true then it probably is, but in today’s low-yield environment investors should be mindful that criminals can tempt investors with rates of return which sound ever more plausible.
“It is becoming ever harder for investors to recognise these websites as being fraudulent.”
In response to this ongoing scam, Action Fraud is encouraging anyone who believes they have been impacted by cloning fraud to reach out to its service.
Those who have seen their savings and investments affected should reach out via http://www.actionfraud.police.uk or by calling 0300 123 2040.
On top of this, victims of cloned scams should contact their bank as soon as possible to inform them of what has happened.