What to do if you’ve been scammed - Gareth Shaw

Convinced that it was a genuine investment, I asked my bank to transfer £50,000 to its bank account. However, I became concerned when I did not receive confirmation of the investment and couldn’t contact the company. Have I been scammed?

Name and address supplied

Gareth says…

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. 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.

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, we will email you with a warning, including a breakdown of it, examples of text messages and emails that can help you stay on guard. Sign up at which.co.uk/scamalerts.

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Thank you

James Mitchinson