It’s likely that anyone trying to sell a carbon credit investment is a fraudster trying to get their hands on some cash.
The Financial Conduct Authority, the agency that regulates financial services in the UK, is so concerned about carbon credit scams that they have published warnings to stop unwary investors falling foul of crooks.
The FCA says unauthorised financial advisers are dressing up their scams by mentioning the names of two genuine firms – Carbon Neutral Investments Limited (CNI) or Gemmax Solutions – to make them look like genuine investments.
Mentioning the firms infers investors are dealing with an authorised firm and that their money is protected under the Financial Services Compensation Scheme, says the FCA.
Scammers con investors
“This is not correct,” said a FCA spokesman. “We are continually getting reports and complaints from investors involved with carbon credit firms. Most have lost their cash because they cannot sell or pick up a competitive rate when selling.”
This is because the carbon credit market is often closed to investors with small trades, making their investments next to worthless.
No compensation
Because they are dealing with unauthorised firms, they cannot take action against them through the
Financial Ombudsman or claim compensation if something goes wrong.
“Most of the firms promoting and selling carbon credits are not authorised to do so,” said the FCA spokesman.
“If you buy make an investment through an unauthorised firm even if an authorised firm handles the money, you will not have access to the ombudsman or compensation if any money is lost.”
Warnings about bogus advisers
The FCA has also issued these warnings about bogus firms posing as regulated financial advisers:
GE Wealth Management (clone firm)
Westberg Equity Research Corp (WERC)
First Trade Europe (clone firm)
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser
Find out how to report unauthorised advisers on the FCA web site
