A I am afraid you have fallen victim to what’s known as a ‘cloned firm’ investment scam. This is where fraudsters set up fake websites that look remarkably similar to those of genuine investment companies, often mimicking the language used and even co-opting the real names of staff members to lend the air of legitimacy.
According to Action Fraud, cloned firm scams led to losses of close to £80m and on average, victims lost around £45,000 each. The Financial Conduct Authority, the city watchdog, does publish lists of cloned firms on its website to warn people of potential scams (fca.org.uk/scamsmart/warning-list), and this list has doubled in size over the past year, with scammers looking to take advantage of the uncertainty of the pandemic and record-low interest rates.
There were 573 warnings on the regulator’s list in 2019; this jumped to 1,184 in 2020. Almost two in five of these were for cloned firms.
And it is perfectly understandable how you and thousands of other victims can get duped. We’ve found a number of examples of fraudulent firms taking advantage of the advert slots on search engines like Google and Bing, sitting at the top of search results. You wouldn’t expect these tech giants to be hosting paid ads for criminals, so why would you question the link that you’ve clicked on?
Unfortunately, it is all too easy for scammers to buy up advertising slots to lure victims in. These can remain live for weeks even after the financial regulator has issued public warnings about them.
Both Google and Bing have told Which? that they take immediate action when they are notified of deceptive and fraudulent ads. Google says that it has removed 3.1bn ads that violate its policies. Sadly, the ad that duped you was not one of them.
Fortunately, in your case, you have a safety net in place. Your bank has agreed to follow a voluntary code of conduct that sees victims of ‘authorised push payment’ scams – where you send money to a fraudster by bank transfer – reimbursed. There are responsibilities for you to follow to ensure you’re sending money to a legitimate firm, but banks also have to carry out a significant number of checks to ensure their customers are protected. If they fall down on any of these responsibilities, or neither the bank or victim is to blame for the fraudulent losses, you should be reimbursed. The bank should give you your money back within 15 working days, or 35 if it needs more time to investigate.
Not everyone gets their money back this way – around 40% of money lost is reimbursed. If the bank does not reimburse you, you can complain to the Financial Ombudsman Service, which mediates disputes between consumers and financial companies.
I’m pleased, however, that when you contacted your bank, it refunded you in full under the code. But there are broader systemic issues here that need to be fixed.
Which? believes that the government must include online scams in its proposed Online Safety Bill, and give online platforms legal responsibility for preventing fake and fraudulent content that leads to scams appearing on their sites.
To protect yourself from scams, Which? has set up a scam alert service – any time we hear of a scam doing the rounds, we will email you with a warning, including a breakdown of the scam, examples of text messages and emails that can help you stay on guard. Sign up at which.co.uk/scamalerts.
Gareth Shaw is the Head of Money at which.co.uk.