The Financial Conduct Authority (FCA) has warned that fraudsters are using a clone firm to impersonate multi-asset retail brokerage FxPro brand, a Cyprus-based and FCA regulated platform, and targeting people in the UK.
To this end, the clone firm Fx Pro was trying to usurp the names and other legal information of FXPRO UK Limited and refer consumers, for example, to the official website of the FCA to try to convince them that they are indeed the authorized firm.
The original broker, which began trading in 2007 and is jointly regulated by the UK’s FCA and Cyprus’ CySEC, is a former sponsor of Fulham and Aston Villa football clubs. Further, FxPro is an established broker that once was planning a potential initial public offering. Although the broker was hoping to follow the listing of its rivals, such as CMC Markets and IG, it had canceled float plans after the FCA introduced stricter rules for activities of firms selling CFDs to retail customers.
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Clones target FCA itself
FXPRO clone had also been taking advantage of its misleading name to solicit traders who are based in the United Kingdom. The firm was not only identifying itself as a well-known online trading company under false pretenses, but it was operating without authorization as well. Consumers are thus deceived, thinking they are dealing with a regulated entity.
The City watchdog said in recent statements that it saw an increasing number of cases of the problem and that FX brokers are particularly vulnerable. The FCA pointed out that a common hallmark of fraud, which are claims of too-good-to-be-true gains, is often in place with this type of scam too.
Ironically, some clone scams contacted the FCA claiming to represent regulated firms and asked to change the legitimate company’s contact details on the register, saying details were out of date. As per usual, this action aims to make the clone firm appear genuine and give their own phone number and website details to potential victims so that traders will mistake it for the legitimate entity.