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CAB warn of investment scam - local pensioners targetted

By SPP Reporter

Richard Gale of East Sutherland CAB: 'Older consumers may be persuaded to part with their hard earned savings.'
Richard Gale of East Sutherland CAB: 'Older consumers may be persuaded to part with their hard earned savings.'

East Sutherland Citizens Advice Bureau and Highland Council’s Trading Standards are concerned about “cold call” telephone calls offering “carbon offsetting” investments to local elderly residents.

Richard Gale, East Sutherland Citizens Advice Bureau manager explains:“We recently received information about a 94 year old man who was continuously pestered by high pressure ‘cold call telephone calls’ from a company based in Florida.

“The local man, who lives in Sutherland and who wishes to remain anonymous, was offered 480 ‘Carbon Offset’ shares for his initial investment of £3000, if he signed and returned an ‘Emission Reduction Purchase Agreement’ within a specified deadline.

“The offer required the £3000 to be paid by ‘bank transfer’ directly into a bank account based in Florida before the agreement became legally binding and any share certificates produced. 

 “Fortunately no money was sent off in this instance. However both Highland Council Trading Standards and ourselves are concerned that other older consumers may be persuaded to part with their hard earned savings by the lure of high returns on financial scams.” 

The matter was reported to Highland Council Trading Standards under the Highland Consumer Partnership (HCP) initiative. 

Glenys Brown, Highland Council Trading Standards Officer, explains: “With bank interest rates at an all-time low for savers, some consumers may be tempted to invest in such schemes in order to enhance their income.

“Pensioners are particularly vulnerable to this type of cold calling telephone scam with promises of high returns by very persuasive sales representatives. We would urge all consumers to be on their guard if they receive such phone calls out of the blue.”

Share scams are often run from “boiler rooms” where fraudsters cold-call investors offering them worthless, overpriced or even non-existent shares. While they promise high returns, those who invest usually end up losing their money.

Boiler rooms use increasingly sophisticated tactics to approach investors offering to buy or sell shares in a way that they say will give investors a huge return. But in the end, victims are often left out of pocket – sometimes losing all of their savings or even their family home.

There has been a recent new wave of financial scams which consumers may not have been aware of. The Financial Conduct Authority (FCA) has recently warned consumers against investing in carbon credit scams. 

A carbon credit is a certificate or permit which represents the right to emit one tonne of carbon dioxide (CO2) and they can be traded for money.However, many investors have reported that as they are unable to sell or trade the carbon credits, then they are unable to make a profit from their investments and their investments are therefore worthless.

As evidence of their investment consumers may be offered Carbon Credit Certificates; Voluntary Emission Reductions (VER’s); Certified Emission Reductions (CERs) or an opportunity to invest directly in a green scheme or project that generates carbon credits as a return on an investment.Callers or sales representatives may claim that carbon credits are “the next big thing” in commodity trading industries and that this is a growing market with government backing.

One such company called, Carrington Group LLC have recently been highlighted in the press by the FCA.

The FCA warns that Carrington Group LLC, 21218 St Andrews Boulevard, Boca Raton, Florida FL33433 United States is not authorised to provide financial products or services within the UK and as such any consumers who hand over money to this company will not be covered by either the Financial Ombudsman Service or the Financial Services Compensation Scheme and may not be able to get their money back.

Other types of financial scams to be wary of include:

Land banking schemes –Land banking companies divide land into smaller plots to sell it to investors on the basis that once it is available for development it will soar in value. However, the land is often in areas of natural beauty or historical interest, with little chance of it being built on.

Overseas property and crop schemes – such schemes offer tree and crop plots abroad as an ‘ethical’ or ‘alternative’ investment opportunity.For instance an offer may include an opportunity to buy a plot on a plantation which harvests agricultural commodities such as biofuels.

Rare earth metals – are chemical elements used in the manufacture of products like computers, mobile phones, batteries, satellites and wind turbines. (The term used may also be ‘rare earth elements’.) However, despite being called ‘rare’ these metals are some of the most abundant resources.The term ‘rare’ comes from the difficulty in extracting them from the earth.

Cloned firms and individuals – are scammers who typically cold-call investors to promote shares, property or other investment opportunities that are non-tradable, worthless, over-priced or even non-existent.Such fraudsters pretend to be UK authorised firms or individuals and will use the name and FCA ‘firm registration number’ to suggest they are genuine. This is what is called a ‘cloned firm’ or ‘cloned individual’. 

Glenys Brown, adds: “Consumers should be aware of the different means of contact made by scammers offering such investments. Contact can be made not only by telephone, but by email, post, word of mouth or consumers may be invited along to advertised seminars or exhibitions, in the local press. 

“Anyone who thinks that they may have been approached by either an unauthorised firm or a cloned firm/individual, regarding a potential investment scam should contact the FCA Consumer Helpline on 0800 111 6768.”

More information about investments scams can be found at http://www.fca.org.uk/consumers/scams/investment-scams

 Highland residents can also visit or write to: The Highland Council Trading Standards Service, 38 Harbour Road, Inverness IV1 1UF.

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