Government closes carbon credit scam firms for 'ripping off' £24m
Nineteen companies have been closed by the Government's Insolvency Service after they "ripped off" nearly £24m from more than 1,500 investors in a carbon credit investment scam.
Consumer Minister Jo Swinson announced today that the victims of the scam, who ranged in age between 50 and 85 years, were sold Certified Emission Reduction Units (CERs) - or carbon credits - using high pressure sales techniques.
Carbon credits, the UN-issued permit that allows a company to emit a certain amount of carbon dioxide, is not available to small investors and therefore the investments were deemed worthless.
The credits are traded in high volumes to make the mechanism worthwhile in carbon emissions reductions, which meant the relatively small investments by the firms victims were not going to make a return.
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," she said.
The companies included Eco Global Markets Limited, which alone took at least £8.5m from more than 230 investors and was wound up by the Insolvency Service in July 2013.
Investors were led to believe that they could expect returns of up to 42% - a figure taken from a news article published in 2010 and out-of-date. The company also sold more carbon credits than it had, leaving 230 people with nothing of value.
One of its victims, an 89-year-old man, told investigators that the salesman met him near his home twice - once at a train station near his home where he handed over £20,000 for 2,000 CERs.
Two other companies, Anglo-Capital Partners Ltd and Cavendish Jacobs Ltd, which between them took over £1.2m, were wound up in October 2013.
Charity director for Age UK, Caroline Abrahams, said: "It is despicable that these companies seem to home in on older people as an easy target. Scams can take place on the doorstep, by phone, on the internet or through the post and the sad fact is that if something sounds too good to be true then it probably is".