Yahoo Finance How fraudsters use 'clone firms' to trick investors
Britain’s financial watchdog has warned investors to look out for ‘clone firms,’ where fraudsters set up sophisticated copies of respected companies.
It says scammers have begun using the tactic as a new way to encourage investors to part with their money for shares, property or other investments which are “worthless, overpriced or even non-existent.”
They use highly similar company names, firm registration numbers, addresses and other details to recognised firms, sometimes mixing genuine and misleading information.
The latest such ‘clone firm’ called out by the regulator in the UK shows an uncanny resemblance to an investment arm of the French insurance giant AXA.
AXA Investment Managers UK is a genuine investment management company, authorised to trade in Britain by the Financial Conduct Authority (FCA).
But it has been imitated by a clone firm calling itself ‘AXA Investment Managers UK Limited/ AXA IM Asset Management.’
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The clone firm also used a highly similar website — ’www.axa.im.ie.com’ — to the real website, ‘www.axa-im.co.uk,’ though its page is no longer available.
Companies or investors which give money to unauthorised firms are not covered by the Financial Ombudsman Service or Financial Services Compensation Scheme if things go wrong.
The FCA says: “We strongly advise you to only deal with financial firms that are authorised by us, and check the Financial Services Register to ensure they are. It has information on firms and individuals that are, or have been, regulated by us.
“If you want to check a consumer credit firm that may not yet have been authorised by us, please also check the Interim Permission Register. If a firm does not appear on the Register but claims it does, contact our Consumer Helpline on 0800 111 6768.”
AXA Investment Managers UK sent the following comment to Yahoo Finance UK:
“In recent years we have seen an uptick in company misrepresentation, particularly with financial services fraud becoming more sophisticated and harder to identify by investors. Both the City of London Police and the Financial Conduct Authority (FCA) are aware of this trend, and are keen that firms take action themselves to protect their reputation and investors.
Whenever AXA IM has been targeted by impersonators, we take the necessary steps to report the incident directly to the FCA and Action Fraud, the National Fraud & Cyber Crime Reporting Centre run by the City of London Police, so that investigators can begin to trace perpetrators and ultimately protect customers. It is also important that any individuals impacted report any losses to the police, so that a criminal case can be opened. AXA IM lists all instances of impersonation that we are, or become aware of on our website, in order to inform potential investors of impersonators and whose products are therefore fraudulent.
“AXA IM also sits on the Investment Association’s (IA) Financial Crime Committee and has worked closely with the organisation to develop the latest Firm Impersonation Guidelines for its members. This document advises asset managers of the proactive and reactive actions they can take once they have been targeted. One simple measure a member of the IA can take is making sure it’s page on the FCA website lists the correct phone number so a customer can call a legitimate line to check the validity of a product.
“We will continue to work alongside the police, the FCA and the IA to not only protect investors, but also to educate firms on fraud and misrepresentation.”
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