More than wealthFebruary 13 2020

Digital Dangers: Enhancing your protection from clone firms

2 mins read

With finance becoming increasingly digital, scamming has also evolved. As a result of the appearance of new digital intermediaries such as crypto currencies, and social media serving as an easy way to reach people, investment scams have changed substantially. According to a poll by the Financial Conduct Authority, under 25s were 6 times more likely to trust an investment  offer that was made through social media, than those over 55.

Clone firms are one of the most common type of scam, with the Financial Conduct Authority (FCA) recording more than 200 of them in 2018. They pretend to be well-established authorised firms with legitimately looking websites materials, and staff. The problem does not only expand to smaller investment firms, but wealth management companies such as UBS AG who have been the subject of cloning, and telling apart the clone and the legitimate company can sometimes prove difficult.

The following tips are aimed to help you recognise when contacted by a clone firm:

  • If contacted unexpectedly, check the contact details, such as website address, email and phone number provided in the FCA register and compare them with the one you have been contacted from. You then have the opportunity to contact the firm about their offer on the contact details provided by the register.
    • You can access the FCA register directly at register.fca.org.uk which can protect you from phishing.
  • You can check whether a firm is authorised by the FCA in their register, and can check for warnings on their profile.
  • Seeking professional and independent advice from trusted firms and individuals, such as  a family office, can protect you and your wealth from clone firms.

Unconventional digital investment products, such as cryptocurrencies, are also increasingly prone to scams with an estimated $1.7 billion in cryptocurrencies stolen or scammed in 2018, according to CipherTrace Cryptocurrency Intelligence.

For further information on how to avoid the dangers of an increasingly digital world, read our blogpost on cyber security.