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Clone firm investment scams – what are they and how to spot them?

We take a closer look at the latest spate of investment scams and what you can do to protect your wealth.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

You can’t become complacent when it comes to taking steps to protect your money from financial crimes. Fraudsters are always working out new ways to try and outwit us. One of the latest trends being reported from the Financial Conduct Authority (FCA) is in ‘clone firm’ investment scams.

Clone scammers selling fake investment products pocketed over £78 million from UK citizens in 2020, with victims losing £45,242 on average.

We take a look at what they are and how to spot them, as well as some general guidance on dealing with scams.

What are clone firm investment scams?

Clone firm investment scams are financial operations which involve fraudsters using literature and websites that mirror the details of authorised firms, like pension providers or investment platforms.

They’ll try to convince you that they work for a genuine company and use high-pressure selling tactics to get you to buy ‘investments'. These ‘investments’ are worthless and often aren’t even offered by the company they’re pretending to be.

5 tips to help spot them

  1. A seemingly genuine call to promote an investment – Scammers might call you promoting an investment or offer you money in exchange for your shares. We’d never do this.
  2. Asking to send application forms by email – Scammers often ask you to send applications by unsecure email. Where possible, we’ll ask you to complete an application on our website, over the phone or by post. If you need to send an application by email, protect the attachment with a password and let us know what the password is separately.
  3. Trying to discuss your personal information by unsecure email - If we need to talk to you about your HL account, we’ll contact you by secure message, which is sent to your online account.
  4. Offering to invest in a product the genuine company doesn’t offer – HL will never call you to promote a particular investment or product. Scams on social media and search engines have become more popular with fraudsters recently.
  5. Insisting you send money via bank transfer – Scammers often ask for money to be sent electronically to a bank account, overseas bank account or a currency exchange provider. The quickest and safest way to send us money is usually by debit card via our website or by calling us, but if you need to send us a bank transfer, you can contact us securely to verify the correct details before you make a payment.

For lots of fraudsters, this is a full-time job. They have the time and expertise to try and build a relationship with you. These scammers are extremely persistent and their aim is simple – to take your money. Remember, if it seems too good to be true, it probably is.

Protecting yourself from scams

Check the firm contacting you is FCA-authorised

The FCA authorises almost all financial services companies in the UK. If they’re not authorised, it could be a scam. You can check the Financial Services Register to see if a company or individual is authorised or registered. If you’re contacted by a company you’re not familiar with, you should always check the register before you act.

Check the company contacting you is genuine

To make sure you’re being contacted by a genuine company, you should call their switchboard number which you can find on the FCA Register. If they phone you, it’s usually best to end the call, check the register and then call the company back on the number found on the FCA website.

If you can’t find any contact details on the FCA Register or if the firm claims they’re out of date, check by calling the consumer helpline on 0800 111 6768.

If you’re dealing with an overseas company, you should check with the regulator in that country and also check the scam warnings from foreign regulators.

Remember, phone numbers displayed on incoming calls are easily spoofed by fraudsters to make it appear they’re calling from the expected location or company. If you don’t feel comfortable then it’s completely acceptable to stop, think and check before taking any action.

Check the FCA Warning List

Use the FCA Warning List to see if the company is known to be operating without the FCA’s permission.

Even if a firm isn’t on the FCA Warning List, it might still be a scam – scammers will change names and details all the time.

Reject unexpected investment offers whether made online, on social media or over the phone. Be wary even if you made the first contact.

What to do if you think you’ve been scammed

Call your bank straight away – they’ll be able to help you with the next steps.

If you’ve been defrauded or experienced cybercrime you should report it to Action Fraud either online or by calling 0300 123 2040.

If you've started a pension transfer and now suspect a scam, call your pension provider straight away. They might be able to stop it.

You should also report what’s happened to the FCA either online or by calling 0800 111 6768.

If you’ve noticed any suspicious activity on your HL account or think your account might’ve been compromised, then please contact our Online Support team on 0117 980 9984 as soon as possible.

Help with the emotional impact of fraud

Falling victim to fraud can have a huge emotional impact as well as being financially crippling. Victims can often feel embarrassed and don’t want to tell people what’s happened, even though they’re not to blame.

If you need to talk to someone about how you’re feeling, you can contact Victim Support either online or via their support line on 0808 168 9111. You can also contact The Samaritans at any time of the day or night on 116 123.

If a scam has left you struggling financially, you can contact Citizens Advice. You can speak to an adviser to help you find a way forwards, via their Adviceline. They are available 9am to 5pm Monday to Friday. If you live in England call 0800 144 8848. If you live in Wales call 0800 702 2020.

How secure are your pensions and investments with HL?

The security of your investments and pensions is one of our top priorities. And we’re dedicated to keeping your HL account as safe and secure as possible.

Our Security Centre keeps you updated with the potential threats that might affect you and your account. We explain some of the measures we take to help keep your details safe and show you the things you can do to help protect yourself. We’ll never cold call investors and if you’re ever concerned about the security of your HL account please contact us.


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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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