The FSA says it received nearly three times as many reports about cloned firms in 2011 compared with the previous year.
Cloned firms present themselves as genuine authorised firms or individuals but they are a separate company with no affiliation to the firm they are cloning. In 2011, the FSA got 449 reports about cloned companies compared with 161 in 2010.
The FSA has reported a 19 per cent increase in boiler room fraud enquiries, up from 4,527 in 2010 to 5,401 in 2011.
However, there was a 7 per cent drop in the number of people that invested in such scams, from 831 in 2010 to 770 in 2011.
FSA head of unauthorised business Jonathan Phelan says: “A 7 per cent drop in the number of investors might seem small but in this case it represents 61 people.
“Our research shows that the average investor loses around £20,000, so it is possible that around a million pounds in consumer losses may have been prevented.”
PageRussell chartered financial planner Tim Page says: “It is obvious to advisers which firms are legitimate but for clients, it is not always as clear. If there is one area of the FSA that I would agree to having more resources, it is the team that looks into unauthorised business.”