These scammers impersonate a company lock, stock and barrel to try and defraud people.
Clones are the stuff of sci-fi horror films, and sometimes reality – witness the fuss over the Dolly the Sheep cloning. That was way back in 1996 and no one is really sure where that has taken us.
But outside the cinema and the science lab, cloning can be a big and potentially profitable business – even if it's ruinous for those who are taken in. I've written in the past about the cloning of firms that are regulated by the Financial Services Authority (FSA). They take the name and the registration number of the firm, often stealing the names of the regulated individuals who own the firm or work there.
Clones also copy a legitimate website but with a slight difference – a .co.uk becomes a .com or there will be a slight change so that XXXfinancialgroup becomes XXXfg. In some cases, they don't even bother – they just say the website of the cloned company belongs to them.
According to the FSA, the threat is ever-present – just like those scary films. In the last six months of 2012, it received 147 reports of clone firms, a figure which must be the tip of the tip of the iceberg.
A tale of two Ariuns
In the most recent recorded cloning, the victim is Ariun Financial Consulting, a small firm of financial advisers based in Richmond, Surrey.
Its company name, address, FSA registration number and the identity of its principal – Chris Bryans – have all been copied by a firm called Ariun Financial Group. The perpetrators even set up a company which claims to have Mr Bryans – Samuel Christopher Bryans to give him his full name – as its director.
The crooks' phoney website, created last July, is full of awards and qualifications. It claims to have won a 2010 award from Money Marketing as “best discretionary adviser”. This is, needless to say, a lie – the award that year went to Whitechurch Securities. Equally dishonest is the use of the Chartered Insurance Institute logo to show it has passed investment industry exams.
A numbers game
But the fraudsters, who have been cold-calling investors over the age of 45 with substantial funds to invest, with offers of phoney bonds and shares, slipped up on one detail. They got the phone number wrong.
Yes, they had stolen the real firm's name and address but they set themselves up with a phone number in the wrong Richmond. Instead of an 020 code for Richmond, Surrey, they used 01748, the code for Richmond in Yorkshire. While both Richmonds are well-off towns with much to interest visitors, they are 250 miles apart.
[SPOTLIGHT]This does not mean the crooks actually had an office in the Yorkshire town at any point either. It's easy to get a phone number set up and then ensure it moves around with you.
I called the number, only to be told “all our advisers are busy”. I left a message but so far there has been no response.
It is even easier to set up a phoney company than a phoney phone number. Using Mr Bryans' name as a director, the scamsters set up Ariun Capital Management in April 2012. There is “a proposal to strike off” notice against this company. As victim, the real Mr Bryans will now have the stress of cleaning up this mess as a search against his name reveals a mix of genuine and clone companies.
How to protect yourself
So how can you defend yourself against clone companies?
There is a cardinal regulatory rule that states that no one is allowed to cold call investors. If anyone does, then they are in breach of the law. It's that simple. So no real company does this. Companies selling non-regulated assets such as wine or land are not bound by this but real ones do not phone out of the blue either.
You can also check up on the firm in the easy to access FSA online register. See how many advisers are listed. The real Ariun is small – with just the real Mr Bryans.
The false one claims on its website that: “Since 2001, the team at Ariun Financial Group has worked hard to make us the one-stop solution to your personal, family and business investment partner. The senior investment management team cumulatively have over 150 years of personal investment experience, in the managed fund, financial planning and individual brokerage sector.”
That sounds very big but the 150 years would be meaningless, even if true (which it is not). There are no names on its impressive-looking website so there can be no check.
Grammar matters
As you'll probably have already noted, the English in the above quote is tortured, as is the following: “When looking for a ‘full life cycle’ investment firm, look no further than Ariun Financial Group as we do provide not only a full range of investment products for you financial future, but also the level of experience, trust and care that is promised and proven.” Utter garbage.
And how about this – also full of mistakes and no doubt copied from elsewhere: “We are pleased with the accomplishment of receiving these awards based on the satisfaction of the clientele, who voted on categories in which we excelled. We commit ourselves ourselves to upholding these distinctions and furthering our the drive towards excellence and customer satisfaction.”
The FSA has issued an alert on this clone, warning investors not to deal with the phoney firm. But it has yet to count the damage the rip-off has inflicted on innocent investors who believed they were dealing with a real, regulated concern. Not to mention the damage it's inflicted on the real Chris Bryans.