In order to scam its customer base. A lot of brokers go unimaginable lengths in order to achieve their goals. Sometimes it may be sponsorships or large sums of money directed towards their marketing campaigns, appearing pretty much everywhere you go. Social media, other website ad sidebars and etc. There is also 1 more scam strategy that these brokers have, and that is called cloning.
What is cloning?
Cloning is exactly what the name suggests it to be. A company who is not regulated, not registered and is basically a week old company, often takes the identity of a very well established and famous company. For example, if this webpage to suddenly change its domain to bloomberg.com and start marketing itself es Bloomberg then that would be called cloning.
In this case, it was a clone of a well-established Firm in the UK called Capital Assets Management. The clone was marketing itself as Capital Assets UK, stating that they were regulated by the FCA and even stating the very same address of the company they were cloning. The FCA was able to quickly uncover the whole ordeal and put out a warning against them.
Is this alarming?
Normally we would say that yes this is alarming that such a large corporation was able to get so easily cloned. However, these types of scams have become monthly occurrence and traders have become accustomed to ways of avoiding them. The FCA is also developing new tools in order to combat such a large influx of scammers appearing all the time.
One of the most important things you need to do when you are looking at a financial firm is to see their regulator. If you think that there is still something fishy going on, then the FCA has customer support who will help you verify a certain company. Remember that even though the regulators are doing their best in regards to finding ways to weed out clones and scammers like these, there is still a considerable gap in their defenses, leaving it up to you to be able to defend yourself. However, the FCA also acknowledges this and has given out advise in their warning on how to avoid these types of clones.