REDD-Monitor has reported several times on sales of carbon credits in the UK, from what seem to be boiler room operations. The Metropolitan Police recently put out, “The Little Book of Big Scams” (pdf file, 3.9 MB), explaining how to avoid these and other scams and providing advice on what to do if you are the victim of an investment scam.
The National Fraud Intelligence Bureau has a warning page on its website about carbon credit scams: “The reality is victims are handing over their savings for worthless vouchers from an unregulated market, with individual losses running into hundreds of thousands of pounds.” NFIB’s website includes the following information and advice:
- If you buy carbon credits you WILL NOT make any money no matter what the salesman says.
- Companies will not offset their carbon allowance by buying carbon credits from individuals – as the salesman claims.
- Companies will purchase carbon credits from other companies/brokers and these deals take a lot of time to set up and are heavily regulated – for this reason carbon credits are not investments that an individual can make money on.
- There is a heavily regulated market for carbon credits and this is the market that the salesman will be referring to. However individuals do not invest in this regulated market. What the salesman will actually sell you is what is known as a “voluntary” carbon credit where environmentally conscious small businesses and individuals pay to off-set their carbon emissions. This is not a “regulated” carbon credit.
- These are bought by the salesman for around 50p and sold to victims for a massively inflated priced dressed up as carbon credits from the “regulated” market.
If the salesman believes that the victim has more money to invest they may even give a return on the initial small investment to build confidence in the victim. They will then request a larger investment promising higher returns. The victim will jump at the chance and then lose all their money.