Carbon credit scams shut down by regulator

The Momentum UK Team 06 November 2013

It was announced today that nineteen firms who “preyed on older people” with carbon credit scams have been closed down by the industry regulator.

The nineteen firms in question attracted investments of almost £24 million from over 1,500 people, and were shut down by the Insolvency Service in the last 15 months, a minister has announced.

The firms encouraged people to invest in “worthless” carbon credits - permits that offer companies the right to emit one tonne of carbon dioxide. Investors were promised huge returns for trading the permits, but this was far from the reality. The amount invested, although hugely significant for the individual investors, was not enough to attract interest from large companies, who typically buy carbon credits in bulk.

Consumer minister Jo Swinson said:

“This is a particularly contemptible scam as it not only preyed on older people trying to maximise their savings, but also targeted their sincere desire to make ethical investments. Instead, investors have been left out of pocket with shares that are either worthless or do not exist.

“In the last 15 months we have wound up 19 companies for trading in these non-viable credits and we will continue to take robust action against any more companies attempting this scam.”

The Insolvency Service says that the scams mostly targeted older people, with the majority of customers aged between 50 and 85 years old. A spokesperson for the service said that many of the firms in question used high pressure sales techniques and “played on people's keenness to 'do their bit' to save the environment while making an investment at the same time.”

Caroline Abrahams, charity director for Age UK, warned older people about the dangers of sams like these:

“Our advice is if you feel under pressure to commit, then please just step away because any reputable company will allow you time to think an offer over. Anyone can be taken in by a scam so people should never be embarrassed to report a crime. If you feel you are or have been a victim speak to the police, a family member or friend.”