Clone firms, firms which assume the identity of a successful, FCA regulated firm, have always been a problem. Recently we have seen an increase in the number of clone firms brazen enough to use not only the name of an FCA regulated company, but the unique firm reference number (FRN) too. All of this is done in an effort to scam customers out of their hard earned cash. With Scottish debt levels as high as they are, it’s incredibly important that consumers only seek debt advice from FCA approved and regulated firms. Here’s how to spot and avoid fraudulent clone firms operating outside of FCA authority.
How clone firms work
Since almost all firms offering financial advice and services in the UK require FCA regulation in order to operate, there is a lot of profitability in coming across as a regulated firm. T
hese clone names obviously tend to take similar names to the original company, pretending that they fall under the company group. In some cases clone firms may even attempt (unsuccessfully) to change the original firm’s details on the FCA’s Financial Services Register in order to appear genuine.
Since these clone firms don’t have customers to start with, most of them start by cold calling, offering services which may or may not actually exist. You should always be incredibly wary of anyone cold calling, offering financial services.
How to spot a clone firm
If you suspect you’ve been contacted by a clone firm the first thing you can do is Google their phone number.
This as a quick and easy way to see if there is any possibility that they are genuine. If you answered the call, make sure to ask for their FRN. As a clone firms lack an official FRN they may try to deflect the question.
Some will even go as far to provide a false number, saying that the contact details associated with that FRN are out of date. The FCA update their register every evening, so don’t be fooled by this.
What to do if a clone firm calls you
To quote the FCA directly, “Remember: if it sounds too good to be true, it probably is.”
Make sure to check the contact details of the firm against the FCA Register and see for yourself whether or not they are authorised and regulated as they claim to be.
If you genuinely feel that you have been contacted by a clone firm you should report them directly to the FCA.
Remember that if somebody gives money to a clone firm which is not authorised by the FCA that person is not protected by the Financial Ombudsman Service or the Financial Services Compensation Scheme. Dealing with clone firms is a very slippery slope into debt.