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Some will even go as far to provide a false number, saying that the contact details associated with that FRN are out of date.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.
Where do clone firms get my information?
A clone firm may harvest your details from a number of different sources. A common example may be from social media where they are known to use clickbaitesque headlines, persuasive text and misleading claims.
However, Google is another prominent place where clone firms advertise their services, sometimes masquerading as debt charities with Google itself previously announcing a crackdown on misleading debt advice ads.
Clone firms creates ‘leads’ and then pass those individuals onto a debt packager. While they may not get paid a fee for packaging those cases, they are often unauthorised to give debt advice and still make a commission from the information you provide them with.
You may also be passed onto a debt packager from a loan company if you’ve recently been declined for a loan and lastly, not least, you may be cold-called by a debt packager.
The Official Trust Deed Scotland®
If you get a phone call from someone introducing themselves as Trust Deed Scotland® and you’re unsure who they are, you can call us directly on 01412210999 or read our handy guide: Making sure it’s Trust Deed Scotland.
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.