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by Martin on September 27th, 2019

UK FCA warns about clone Forex brokers operating illegally

The United Kingdom’s Financial Conduct Authority has issued warnings to the public that there are several clone firms operating without a license and using the names of previously or currently registered legitimate companies.

The United Kingdom’s FCA is one of the few financial authorities that has to dish out warnings about such companies operating in the first place. It’s very rare to hear any other regulator even mention the word clone. The second most common one is probably CySEC.

Regardless though, here’s the list of companies in question:

  • Capital Trade Fair
  • Perterra Funds PLC
  • Nautilus Indemnity
  • Midpoint Exchange
  • Magna Umbrella Fund PLC
  • Best Bonds & Savings

This week the number of clone firms is extra big as previously it included a maximum of two or three.

How to identify clones

In most cases, the clone companies use the names of already authorized companies. However, they can’t copy them directly due to already taken up positions and brand.

For example, it’s sometimes more than enough to look at the domain name of the website you’re about to access.

Clones would include something like a “-” symbol inside or a different extension. For example, if the company is UK registered and caters to the UK population they’re likely to have a “co.uk” domain extension. The clone would use something like “.eu or .com” in order to garner more trustworthiness.

However, domains are sometimes very well hidden as well, which would require a little bit more effort from the side of the consumer. The effort includes looking up the company on FCA’s list and accessing it through the link available on the official website.

That way, it’s guaranteed to find the legitimate platform rather than end up on a fake.

Why is the number growing?

Registering or promoting fake companies is extremely easy for scammers. They don’t need to come up with any type of new content. All they have to do is register a domain with a similar name to the real company, copy the design and functionality of the website and simply redirect the deposit account to their own account.

That’s the only thing they have to do which usually doesn’t even take $500 to do.

Considering that they can defraud at least 10 people before they’re found out, it’s easy to say that they manage to make a profit regardless.

By Martin

Martin is a professional trader with 3 years of working experience in a Cyprus based brokerage. After the experience, he moved to the UK where he became a financial news reporter at a local news outlet. His years of experience of trading helps him deliver the most quality news, while also analyzing the impacts of it on various markets.

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