Fraud expert warns FCA Firm Checker will not stop scams

The Financial Conduct Authority's new Firm Checker tool is unlikely to reduce fraud levels despite improving visibility of authorised firms, according to fraud specialist Jonathan Frost, Director of Global Advisory for EMEA at BioCatch.

The Firm Checker allows consumers to search whether a financial firm is authorised and holds the correct regulatory permissions. The watchdog has positioned the service as a way for individuals to check a company before engaging with it for investment or other financial products.

Frost, who previously led development of the UK's National Fraud and Cybercrime Reporting system at the City of London Police, said the initiative addresses transparency but not the way modern scams operate.

"Uniting warnings with the register is a sensible step to improving transparency, but the FCA Firm Checker tool doesn't fundamentally shift the dial," said Jonathan Frost, Director of Global Advisory for EMEA, BioCatch.

The comments underline a growing tension between regulatory efforts that focus on consumer checks and the reality of sophisticated social engineering scams. These schemes often manipulate victims over a sustained period, using trusted brands and apparent regulatory status as props in a wider fraud.

Registered firms exploited

Frost argued that the main risk does not come from consumers willingly dealing with unregulated providers. He said criminals are increasingly exploiting the existence of legitimate, regulated firms as part of the deception process.

"Fraud isn't happening because consumers are choosing unregistered firms. It's the registered firms themselves being weaponised as part of the social engineering journey. Victims are directed to them as a proof point, before being diverted to an entirely different entity to make an investment," said Frost.

In many investment scams, criminals build credibility by referencing well-known financial brands and by directing victims to official registers or websites. Victims often see genuine firm details, which appear to verify the pitch. The fraudsters then steer them towards different bank accounts, websites or investment vehicles that sit outside the regulated entity.

Regulators and industry groups have repeatedly warned about such "clone firm" schemes. These scams mimic the names and registration details of legitimate firms. They often use lookalike websites and forged documentation.

Limits of search tools

The FCA has promoted Firm Checker as a resource that supports consumer decision-making around investments and financial services. Frost said this type of tool does not address the way criminals bypass consumer checks altogether.

"Given that social engineering is predicated on circumventing controls, no search tool will meaningfully reduce fraud. The real answer lies in tackling the manipulation at its source, mainly on social media platforms, and disrupting the money mule networks that move the profits," said Frost.

His comments reflect broader concerns in the fraud prevention community about the origin of scam approaches. Many investment and impersonation scams begin with adverts, posts or unsolicited contact on major social media platforms and online marketplaces.

Once initial contact is made, criminals often move conversations onto encrypted messaging services or direct phone calls. They establish trust and urgency, then move funds through networks of "money mule" accounts that obscure the final destination.

Focus on platforms

Frost's career has spanned law enforcement and industry collaboration initiatives. He has worked on projects for the Foreign, Commonwealth and Development Office and the Home Office. He also served as Director of Technical Collaborations at Stop Scams UK, which has worked with companies including Meta, Google and BT on anti-fraud efforts.

Law enforcement bodies and campaign groups have called for stricter requirements on online platforms that host financial promotions or user-generated content. They have also pushed for faster removal of scam content and stronger verification of advertisers.

The UK's Online Safety Act introduces new duties for large platforms around illegal content, which includes certain types of fraud. Financial services firms have argued that enforcement and practical implementation will determine the impact on scam volumes.

On the financial system side, banks and payments providers are investing in analytics and monitoring that detect money mule activity and suspicious transfers. Industry initiatives encourage data sharing between firms and with law enforcement, in an effort to identify mule networks and repeat patterns of fraudulent behaviour.

Frost's comments suggest that tools aimed at consumer verification of firms will sit alongside, rather than replace, these wider measures. The debate over how responsibility for fraud prevention is shared between regulators, financial institutions, law enforcement and online platforms is likely to intensify as scam losses remain high.