Carbon credit scammers have ripped £24 million off 1,500 elderly investors as fraudsters set up companies deliberately aimed at preying on people’s desire to go green and support the environment.
The companies conned customers between 50 and 85 years old by offering worthless carbon credits while encouraging them to buy in to the bogus deals with high stress sales talk, said the Insolvency Service.
Carbon credits – a term for Certified Emission Reductions (CERs) – are traded but not on markets open to individual investors.
To stop the scammers, the Insolvency Service has closed 19 companies in recent weeks.
The largest fraudster was Eco Global Markets Limited, which scammed at least £8.5 million from over 230 elderly investors.
Salesmen lied
The Insolvency Service wound up Eco Global in July 2013. Two other companies, Anglo-Capital Partners Ltd and Cavendish Jacobs Ltd which between them took over £1.2 million, were wound up in last month.
The Insolvency Service explained that the salesmen sounded plausible and relied on people’s keenness to display their green credentials to help the environment with what they thought was an ethical investment.
The promised returns were massive and unattainable, said the Insolvency Service.
Salesmen encouraged investors by claiming firms like British Airways and Marks & Spencer would buy their CERs, but they were never involved in the scheme and no CERs were ever traded.
To take an active part in the market, investors trade large volumes of CERs far above the numbers sold by the bogus set-ups.
Action Fraud, the government’s central consumer protection group, says £1.2 billion is paid out to bogus investment companies in the UK, promising big profits from share sales, wine investments, land banking and carbon credits the most common lures for customers.
Worthless investment
Consumer Minister Jo Swinson said: “These scammers have no scruples and are prepared to take the life savings away from the elderly who are looking for some way to make their retirement money go further in hard times.
“Many of these people wanted to ethically invest their money with a genuine intention of trying to help the environment.
“Fraudsters have left these people with worthless investments and no hope of getting their money back.”
The minister also encouraged investors approached by hard pressure salesmen to make some inquiries before parting with any cash.
Action fraud suggests:
- Don’t let pushy salesmen rush you into a deal
- Never buy off cold-callers
- Take independent legal or financial advice before committing any money
- Check out investment companies with the Financial Conduct Authority
It’s all very well for Action Fraud to suggest checking with the Financial Conduct Authority, but as Action Fraud must know, of the scam products listed the FCA only regulates shares. It does not regulate investment in wine, and banking, carbon credits, or investments Action Fraud doesn’t even mention such as diamonds and trees. Talk about passing the buck! Since Action Fraud itself doesn’t actually take any action, perhaps it should find itself a new name?