Cloned Firms and How To Look Out For Them
A cloned firm is a fraudulent company or individual that takes the name of a legitimate company or claims to be authorised by the Financial Conduct Authority in order to promote investment opportunities, shares, property or steal money.
In the world of payday and guarantor lending, you may be approached by a company by a cold call or by email who could try to sell you a loan or claim that your loan has been accepted when you haven’t applied directly with them.
A recent tactic by fraudsters is to use the phrase ‘firm registration number’ where they claim their company is fully FCA regulated when this is not the case. Although the scammers give their address, phone number and website, their company may not be licensed or their license is out of the date. There is also the possibility that they hack into another website of a responsible lender and change the contact details to reflect theirs.
Why would they approach me?
If you apply for guarantor loans, it is assumed that you might apply with several companies and if you get declined, your details might be passed around. So it is not uncommon, especially in the payday loan industry to get unsolicited text messages, emails and phone calls.
And if you need a loan for a few hundred or thousand pounds and your applications have not been successful, the lure of getting funds from another source can be appealing.
What can I do to protect myself?
The FCA gives an explanation of Cloned Firms and what you can do to protect yourself, including:
- Check the FCA register here. You can get the name of the company that has approached you, either by checking the website, emails or asking them over the phone. Then you can try match up the name and authorised number. The register will tell you if the company is legitimate or not, under investigation or their license has expired. It is important to check the name of the company closely because a simple variation of a name, could indeed be a different company altogether.
- Check Companies House to see if it is a real company and ask for the name of Directors and their head office. You will be able to match up the names and address if the company is legitimate or catch them out if not.
- Some basic things you can do if you feel that you have been approached by fraudulent companies including reporting the emails as spam, blocking the phone numbers from your mobile or asking to be removed from their database. In extreme cases, you could always change your phone number, email address or debit card.
- It is good practice to remove or shred any documents you get in the post that have personal or sensitive information on them including bank statements. You could always request these to be received online from your bank, to save you having to deal with the paper copies. You can also shred bills, travel documents and more when you receive them in the post.
What happens if I have been a victim of fraud?
Unfortunately if you are a victim of a scam from a Cloned Firm, you will not be able to get the money reimbursed via the Financial Services Compensation Scheme (FSCS).
But if you think you might have been scammed, you can contact the FCA’s Consumer Helpline on 0800 111 6768. Any reports will be worthwhile and handled professionally and it is important to make the regulator aware of any suspicious activity to reduce the potential damage to other consumers.