25 Apr 2016

FCA releases warning on four new clone firms

A number of warnings have been issued from the Financial Conduct Authority (FCA) regarding firms that it believes are providing financial services without authorisation.

The firms named by the FCA include RBS Bourse, Capital Trust Ventures, Andersen Consulting (UK) and Beckett & Cromwell. They have been targeting consumers in the UK without being authorised by the FCA.

The FCA warnings included contact details for each of the firms included and stressed that almost all companies who offer, promote or sell financial services or products in the UK have to be authorised by the regulator.

It stated that some firms act without authorisation and some knowingly run scams like share fraud.

FCA say that share scams are often run from ‘boiler rooms’ where fraudsters cold-call investors and offer them worthless and over-priced shares, with some of them not existing at all. These types of scams declare consumers will receive high returns but those who invest usually end up losing their money.

In order to avoid such scams, the FCA has advised people to only deal with firms that are authorised by them and to check the Financial Services Register to ensure that the company they plan to deal with are.

The Financial Services Register includes information on firms and individuals that are currently regulated by them or have been in the past.

The warnings issued provided advice in that consumers should be aware that if they give money to unauthorised firms, they will not be covered by the Financial Ombudsman Service (FOS) or Financial Services Compensation Scheme (FSCS).

One particular scam that has been of priority for the regulator in 2016 is pension scams. In 2015, the watchdog launched a campaign titled ‘Scamsmart’, which is aimed at preventing crime on those who are in or approaching retirement.

The flexibility that was provided by the pension freedoms has given fresh impetus to the scammers looking to operate to this audience.

To tackle the problem, a new phase of ‘Scamsmart’ is running across 2016/17. The phase will include an interactive tool called the ‘Warning List’, which will help people to avoid potential scams.

By Samantha Atherton