Financial watchdogs are warning investors that carbon credit deals offered by dodgy traders are worthless.
The alert follows the disqualification of Christopher Thompson as a director after his company CT Carbon Ltd scammed £1.1 million from telephone cold calls to random investors.
Thompson was disqualified from holding any position of control in a company for 14 years.
The disqualification follows an inquiry by the government’s Insolvency Service, which was triggered by an investigation by a journalist.
The journalist wrote to Thompson asking why he was selling carbon credits called voluntary emission reductions to investors when they could not trade them for a return on any market.
Investors never made a profit from carbon credits
The Insolvency Service found that although the VER certificates were genuine, CT Carbon was selling them with a mark-up of up to 350% in 2011 and 2012.
HM Revenue & Customs (HMRC), the Financial Conduct Authority (FCA) and the carbon credit market’s own trade body had warned consumers in 2010 that carbon credits had no viable exit for investors and that the public could not trade VERs.
Investigators explained that even if investors could trade their carbon credits, the price CT Carbon was selling them for meant they could only be sold as a loss.
Paul Titherington, the Official Receiver in the Public Interest Unit, said: “Thompson would have realised the carbon credits his company was selling were unsuitable as investments due to the price his company charged for them and the lack of a market to trade them.
“Receiving the letter should have made him realise he should not be selling the VERs, but he ignored what was said and simply carried on without any concern that investors would lose their money.”
Carbon credit offer most likely a scam
As well as disqualifying Thompson as a director, CT Carbon was wound up in the public interest.
The FCA warns that investing in carbon credits is most likely a scam.
A carbon credit is a document giving a company permission to emit a metric ton of carbon dioxide. Businesses with sufficient numbers of credits can trade them for cash.
“Many investors have bought carbon credits and none have made a profit,” said an FCA spokesman.
“Our view is that despite claims and promises made by firms selling them, there is no market for them and investors should not buy them without taking advice from an independent professional.”
Some people were sincerely supporting ‘green initiatives’ in this whole fiasco, the reportage of which (across the board) is one sided and misleading. Any deceptive intention is possibly the biggest financial con in recorded history. #Vulnerablity #Fraud #Msconduct #WakeUpCalls #CarbonCredits