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How to check if a company is legit, UK regulations, and how to avoid risking your money and data

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Before you give a new company your business, it’s important to check that they are legitimate and that you aren’t risking your money or your data. Find out how with our guide.
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If you’re considering spending money with a company you’ve never heard of, it’s sensible to find out as much about them as you can before you proceed. 

Con artists use fake companies to make their scams look more real and it’s easy to be duped. Wise up to ensure you’re not their next victim. In 10 easy steps we show you how to check whether a company is legitimate and conforming to UK regulations to help you work whether you can trust it with your money and data.  

1. Check for concrete details

One of the easiest ways to spot a fake company is if there is no evidence of their existence in real life. 

The first thing you should do is check that the company you are dealing with has a physical location. To do this, look for an address on the company's website. If the address is a registered office, even better. If you can’t see this at first glance, check in the ‘contact us’ section or on the terms and conditions page. 

A legitimate company will always give you a way to get in touch with them. Ideally, this will be a proper address and a phone number, rather than a ‘contact us’ form. If it’s just a form, be wary.

If there is an address listed, you can use Google Maps to search for the premises. This is a good way to verify that the business  actually exists. 

The contact phone number should ideally be a  landline – call it and  see who answers. If an employee of the company answers the call, you may be able to get some reassurance and a feel for the business. However, if no-one answers or you’re put through to an anonymous call centre, this may be your first warning sign that the company isn’t legit.

In one case we’ve seen, the address of a “loans company” was in fact a barbers’ shop. When we called the barber to double check there wasn’t an office upstairs, they had no knowledge of the so-called “bank” either.

2. See what others say

Using a search engine like Google can give you all sorts of information on a company, including what people are saying about them. Sites like Trustpilot and Google reviews can reveal a lot about a company before you interact with them.

If someone speaks of a bad experience with the company or warns against dealing with them, you’ll know to steer clear. Equally, you might discover that the company has a good reputation, which will demonstrate that it’s a legitimate firm.

Remember that what’s said on forums isn’t ‘gospel’ but it can act as a useful indicator when you aren’t sure about a company. If you read any negative reviews, you can use your own judgment too. For example, some people might give a negative review because an item was delivered a day late. Other reviews might reveal problems with customer service or product quality. You can decide how good or bad the company really sounds.

Check a company on Google.

3. Search the FCA register

If you’re looking at a company that deals in financial services, there’s a very simple way to check its credentials. All you have to do is look it up on the Financial Conduct Authority (FCA) register.

This  is a database which holds details of every financial company that’s registered and regulated by the FCA. You can search for a company by entering its name and/or postcode.

If a financial services company isn’t listed on the FCA register, avoid it at all costs. And remember to check any number on the website. The “loans company” mentioned above had an “FCA registration” number on its website, but that number didn’t actually correspond to anything on the register itself.

Another good resource is the government's Companies House website. You can use this site to search the millions of limited companies trading, or once registered in the UK, and listed in Companies House.

Search the FCA register.

Search the Companies House website.

4. Check out its  website

A company’s own website can also give you a good idea of whether or not it is truly legitimate. .

Here’s what to look out for: 

  • Poor English, or lots of typos and  spelling mistakes are all signs that it’s likely to be an overseas operation masquerading as an English business. A physical address and landline number.

  • A privacy policy and company history on the site. This could give you information about how long the company’s been in operation, its ethical stance, and its mission statement.

  • A company registration number (CRN) which shows that it is listed with Companies House (and checks out on the Companies House website). All UK companies should have  one and it should be displayed on its website. You might find it within the privacy policy or terms and conditions.

  • If you’re purchasing something online, always check the company's refund and exchange policy. Finally, before you even consider entering your payment details, it’s vital that you check for "https://" at the start of the URL. You should also look for a padlock or key symbol displayed in your browser. That will tell you that it’s a secure connection.

5. Check out their social channels

It could be a good idea to look up the company on social media. Most companies these days have social channels, especially if they’re selling goods to the public. Check out whether they have an active Facebook, Instagram or Twitter profile, and how they’re interacting with customers. This can also be another good way to see what people are saying about the company.

6. Check the domain name carefully

Sometimes you might feel that you recognise the website address because it references a well-known brand. But watch out, because it’s a favourite trick of scammers  to include a recognisable brand name as part of its fraudulent  website.

For example, something like www.cheapipads.net references iPads, but it definitely isn’t the Apple website. The same should apply to something like www.discountgucci.org, which references the Gucci brand but isn’t the Gucci website. Anything like this should raise alarm bells - genuine brands wouldn’t have an alternative site.

Keep your eyes peeled for web domains ending in ‘.net’ and ‘.org’ too as they’re not generally used by genuine retailers. A web address ending in these may well be fraudulent.

7. Consider how you’re being asked to pay

Many fraudulent companies will ask you to pay via bank transfer. If you do this, and it turns out to be fraudulent , you’ll really struggle to get your money back.

Some will even ask you to transfer funds into their bitcoin or other cryptocurrency wallet (and even provide all the instructions needed for you to do so). If you do, there will be absolutely no way to get your cash back.

If you’ve paid by credit or debit card, you do have a chance of getting your money back. Usually it makes most sense to pay by credit card. That way, a dodgy company can’t clear out your bank account, and you’ll also get more consumer protection.

Here’s how Section 75 protects your credit card purchases.

8. Check for a padlock 

Look in the URL bar and see if there’s a padlock symbol. If a website has one, it’s a good sign because it means the site’s encrypted. That means that whatever you do on the site can’t be intercepted, whether that’s browsing, inputting your data or making payments.

That said, scammers have found ways to forge the padlock. So you should always assess its presence in combination with the other recommended due diligence checks.

9. Don’t always trust the trust-mark 

Many people look for a trust-mark label and base their decision on whether to use a website on its presence. But it’s not always the best way to judge a website’s safety.

There are so many different versions of the trust-mark logo out there, and some countries don’t engage with trust-mark schemes at all. The only way you can actually be sure if the trust-mark you’re looking at is genuine is to contact the trust-mark company in question and ask them. 

10. Don't take any risks

Finally, if you're questioning a company’s legitimacy enough to be reading this article the chances are the alarm bells are already ringing. Sometimes it is best to simply go with your gut feeling about a company and trust your initial judgment.

If you’re uncomfortable dealing with the company, it’s best not to. You’re better off safe than sorry.

And always remember that if it looks too good to be true, then it probably is.

What to do if you get scammed

If you think you’ve been scammed, tell your bank immediately. They can increase security on your current account to prevent further money being taken.

You should also report details of the crime to Action Fraud, either via their website or by calling 0300 123 2040.

Here’s what to do if you think you’ve been scammed.

Spending with a credit card offers extra protection from scammers and fraudsters with Section 75 cover. Compare credit cards to find one that suits how you spend.

About Alicia Babaee

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