Half of FCA scam warnings are impersonations of real brands: research

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Half of FCA scam warnings are impersonations of real brands: research

Quilter has released new analysis of the FCA's warning list which shows that 401 impersonation scams have been reported by the FCA this year, and scams involving an impersonation constitute 45% of all FCA warnings issued since 2015.

So far in 2020, the FCA has issued 1,031 general scam warnings involving individual attempts to defraud consumers. This is already an 80% increase on the amount of warnings in 2019, and a staggering 301% increase on the amount of warnings published in 2015. 

Of these, 401 were scams involving a ‘clone' of a legitimate financial services firm. This is wheresophisticated organised criminals impersonate a reputable financial services firms to market non-existent investment products to consumers, predominantly through fake websites and paid adverts on search engines. There have been 34% more ‘clone' warnings so far in 2020 than 2019, and 261% more than in 2015.

Now modern technology has allowed scammers to become much more sophisticated in the methods they use to entice their victims."

Since 2015, an average of 45% of all FCA warnings involved the ‘clone' of a financial services firm: 

Year

FCA scam warnings

‘Clone' firm warnings

%

2015

257

111

43%

2016

324

153

47%

2017

310

157

51%

2018

504

222

44%

2019

573

300

52%

2020*

1031

401

39%

*Up to 10th November 2020
Source: Quilter's analysis of FCA warning list

There is no legally enforceable system for compelling search engines and social media platforms to remove fake websites and fake adverts which use the ‘clone' of a financial services firm. This is why Quilter is calling for new legislation to protect consumers from the dangers of online investment scams, and urges the government to consider including financial scams within scope of their forthcoming Online Harms legislation.

This will ensure that search engines and social media platforms are given legal responsibility for preventing scams from appearing on their sites, and a new duty of care should ensure they react quickly to brand impersonation scammers and prevent them from causing further harm by leaving the scam adverts online.

Debbie Barton, financial crime prevention expert at Quilter commented: "It used to be relatively easy to spot a scam coming from a mile off. This could have been a suspicious call saying you have won a prize, or a dubious text from HMRC saying you are due a tax rebate."

"But now modern technology has allowed scammers to become much more sophisticated in the methods they use to entice their victims, and we are seeing more and more scammers stealing the brands of well-known financial services firms to trick people into parting with their cash. It is becoming much harder to spot the difference and separate fact from fiction."

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Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.