Impostors pose as non-existent division of JPMorgan; retail clients fall for absurd return claim
Would you believe that a bond would return 4.7%? Many middle class British investors did whilst the FCA did nothing
Britain’s tardy regulator, the Financial Conduct Authority (FCA) has been reactively stirred into action with regard to issuing warnings against a series of fraudulent attempts to impersonate divisions of large financial institutions and successfully bilk unsuspecting British investors out of substantial sums of money.
North American bank JP Morgan Chase has once again been impersonated by fraudsters, who have pretended to be a little-known investment arm of the giant in an attempt to trick savers into handing over their money.
This is Money was contacted by a reader who had been emailed from someone claiming to be from ‘Aldermanbury Investments Ltd’, offering a one-year fixed-rate bond from Barclays paying 4.7%.
Of course, a degree of responsibility should be demonstrated by those seeking to invest, as it is common knowledge that in today’s climate, interest rates or fixed guaranteed returns on any low-risk fund or bond would be nowhere near that amount, however the regulatory authority along with the Ombudsman are there for many good reasons, one of which is to stop even the least informed retail investors and traders falling for confidence tricks, however implausible they may sound.
The rate is far too good to be true at a time when the best one-year fixed-rate savings account pays just 0.85 per cent and Barclays itself pays just 0.3 per cent.
The email claimed Aldermanbury Investments is ‘the dedicated fixed-rate platform brought to you by JP Morgan, which gives you access to hundreds of fixed-rate investments from over 40 banks, building societies and institutions through a single account with full Financial Services Compensation Scheme protection.’
It also included links to a fake website, which used an image of the Aldermanbury ‘team’ which was stolen from the legitimate savings platform Flagstone; and used fake news articles and Financial Conduct Authority register information to promote itself.
While Aldermanbury is a legitimate company which had been impersonated by the fraudsters, JP Morgan Chase does not currently offer savings accounts and fixed-rate savings bonds to everyday savers in the UK.
Aldermanbury makes investments in certain financial products on behalf of JP Morgan Chase, according to its latest filings.
The bank, along with fellow American bank Citigroup, is frequently impersonated by fraudsters, but this is the first time This is Money has seen this particular arm appear in a scam.
Unfortunately, it took an approach by a British tabloid newspaper for the FCA to make an attempt to warn potential investors by placing an annodyne warning on its website to state that this was a clone firm. The FCA did this last week, three days after a victim contacted the Daily Mail, and the Daily Mail subsequently taking this up with the FCA.
The Daily Mail reported that Mark Taber, a consumer campaigner who reports scams to the FCA and has called for a greater crackdown on scam adverts which appear online, told This is Money he had reported 561 by himself since 9 January, although a smaller number involved clones.
He said: ‘Most of the scam adverts on Google that I report lead to fake bond, Isa or savings comparison sites which require you to submit your details to receive the promised market comparison.
“When you do so you do not receive a comparison but will eventually be contacted by a scam, often cloning a well-known financial institution. There are two main variants. One is where the scammers impersonate a small firm on the FCA register offering fake bonds in a well, known bank. The second is where the scammer impersonates a big bank or financial institution offering a fake savings product” said Mr Taber.
the Investment Association found some £9.4million was lost in 1,175 reported instances of fraud between the lockdown in March and 12 October, according to the Investment Association, as those stuck at home for long periods became targets for fraudsters.
The number of cases had nearly quadrupled from 300 in July, with losses more than doubling from £4million.
Chris Cummings, chief executive of the Investment Association, said: “In a year clouded in uncertainty, organised criminals have sought opportunity in misfortune by attempting to con investors out of their hard-earned savings. The investment management industry is working closely with the police and regulators to stop these scams, and is collaborating with our partners in government to close them down and prevent them being advertised in the first place.”