The Financial Services Compensation Scheme is dealing with rogue firms falsely claiming to be covered by the scheme at a rate of one a day.
Only last week I came across a particularly blatant example – a site using the FSCS initials in its web address.
FSCS-bondrates.com promised returns of up to 4% a year, boasting: “Our team search the market for the best returning investment products.”
The site is now offline.
Another site, findisasonline.com, claimed “Find the best ISAs online today, FSCS Protected”.
FSCS protection covers savers up to £85,000 and only applies to firms that are regulated by the Financial Conduct Authority.
Far from being regulated, findisasonline.com is on the FCA’s consumer alert list of unauthorised firms.
Another stark example is tesco-promotion.com which claims to be selling Tesco savings bonds and uses the FSCS name and logo despite being unregulated.
James Darbyshire, chief counsel of the FSCS, admits that there’s little deterrent to stop the scammers.
While the FSCS takes action such as asking domain providers to take down rogue websites and reporting them to Action Fraud, he’s not aware of anyone being prosecuted for fraudulently claiming to offer FSCS protection.
“There’s something like one site a day wrongly using our logo or saying something about FSCS protection,” he told the Mirror. “It’s certainly getting more prevalent.”
He called for the Government to expand the scope of its Online Safety Bill to tackle the problem.
At present the Bill includes measures to deal with online harms such as threats to children, cyberstalking and terrorism, but does not deal with online fraud, even though fraud is the most common crime in the UK.
“More needs to be done, which is why we support online scams being part of the Online Safety Bill,” said Mr Darbyshire.
“Locating the fraudsters is not something we do because we’re not an enforcement body.
“We need somebody who can prosecute this kind of fraud, a new regulator through the Online Safety Bill with the powers to do that.
“In the current landscape it’s very difficult to do that effectively.
“There’s certainly not a sufficiently effective deterrent, the proof is in the pudding with these scams being on the increase, that tells the story.”
He also criticised platforms such as Google which let scammers pay to advertise their websites at the top of search results.
“There should be a duty of care to police what goes on their platforms, at the end of the day it’s very difficult for anybody else to do something,” he said.
“More has been done by those sorts of firms but there’s such a proliferation of these scams and nothing seems to be slowing them down.”