The Financial Conduct Authority (FCA), on Monday, said it believes that an online trading website has been falsely claiming affiliation with the authorised brands of Pepperstone.
The copycat scam is the latest in a line of clone firm warnings issued by the City watchdog over the last few years.
The FCA alleges that the copycat broker has chosen to operate under the brand ‘Pepperforeign’, a name similar enough to Pepperstone that it convinced local traders that it was the authorized online trading firm that had contacted them.
A post on the regulator’s website says that the “clone firm” scammers are using the Pepperstone brand as a way to get people to hand over details or money.
The clone entity operates under the domain name https://m.pepperforeign.com, which prompted action from the United Kingdom’s regulatory body, advising everyone to avoid it entirely.
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The fraudulent website is indeed attempting to mislead investors into thinking that it is offering a legal product by using the details of an authorized firm operating under a similar name. It also claims to be licensed by the FCA, using the regulated firm’s registered address and making reference to its actual website, a typical move for a scam company to gain the trust of unsuspecting clients.
As per usual, this seems like yet another instance of a scam operation where an unlicensed company illegally assumes the identity of an authorized company so that traders will mistake it for the legitimate entity.
The illegitimate broker opted to claim an address in Germany. Pepperstone already kicked off its operations in Germany in December, barely four months after it had received a financial services license from the nation’s regulator, BaFin.
Called ‘Pepperstone GmbH,’ the new subsidiary secured its BaFin approvals in August and has a particular focus on the DACH countries, including Austria.
Beyond strengthening its position in its homeland, Pepperstone has been actively growing abroad. In 2020, the Australia-headquartered company has secured financial services licenses in Dubai and Cyprus and has made its entry into the Kenyan forex trading market, which coincided with Pepperstone’s 10th year of operations.