Investors warned as cloning scams surge

'Cloning scams' are now the top fraud threat to people wanting to invest, a new study by The Investment Association (IA) shows. The IA said there were 478 cases of firms being impersonated by fraudsters in the second half of 2024 alone.

Nearly a quarter of these scams succeeded, costing investors £2.7m. Advances in artificial intelligence are likely to make future cloning attempts even more convincing and sophisticated in nature.

These brand cloning scams involve criminals creating a nearly identical duplicate of a genuine website or email, or creating a fake WhatsApp group. They use a reputable company's logo and brand to trick people into parting with their money. Victims think they're making a genuine investment.

Regulatory and Financial Crime Expert at the IA, Adrian Hood, commented "Criminals will use a variety of means to trick people into parting with their money ... That's why we're urging consumers to stay vigilant. With cloning scams topping the list of threats, consumers should double check whether websites or emails are legitimate before transferring any money. The growth of AI is likely to see increasingly sophisticated scams, with criminals better able to mimic legitimate firms."

Working with an independent financial adviser at Blackmount Private Wealth can help you to avoid being scammed. Our research and due diligence processes mean that we'll only ever recommend clients invest in legitimate products and services. Clients also have a direct line to their dedicated professional adviser. If something doesn't seem quite right, we are here to sense check it.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.