UK regulators have shut down 19 companies selling carbon credits in the past 15 months for cheating investors out of 24 million pounds ($38.7 million).
The UK Insolvency Service says more than 1,500 investors were swindled by the companies, which largely targeted the elderly with high-pressure sales tactics and promises of returns, sometimes more than 40 percent, Reuters reports.
A carbon credit, or CER, is a certificate or permit issued by the United Nations upon the prevention of 1 metric ton of carbon dioxide equivalent being emitted through carbon projects that are recognized by and registered with the Clean Development Mechanism and can be traded for money.
Salesmen played on people’s willingness to help the environment while making an investment at the same time, the regulators said. Investors were promised they could make huge returns by selling the credits to corporations such as Marks & Spencer and British Airways. Most discovered there was no market for the relatively small amounts they held as companies that trade CERs only trade in high volumes.
Anglo-Capital Partners was shutdown this month after an investigation found the company raised more than 1 million pounds ($1.68 million) by promising investors that the carbon credits were a phenomenal investment opportunity and to expect returns of between 20 to 25 percent within two years, the government watchdog group says.
In this case, company representatives calling investors referred to themselves as bankers, giving the false impression they were dealing with a reputable financial institution, according to the UK Insolvency Service.
“A carbon credit is generally defined as a permit that allows the holder to emit 1 tonne of carbon dioxide into the atmosphere,” says Chris Mayhew, investigations supervisor working for the Insolvency Service. “Here the business was about releasing as much hot air as it took to achieve a sale.”
Other companies shut down by the UK government include Cavendish Jacobs, World Future Limited, Capital Wealth, FourteenForty Limited, Hildon Green Energy Markets, Tullett Brown Limited, Foxstone Carr Limited, Carvier Limited, Sloane Knight, Bric Global Limited, Foreco Growth Investments Limited, The London Carbon Credit Company, The London Carbon Company Limited, Carbon Acquisitions, Oxford Sunergy, Fast Corporate Solutions, Vero Energy and Eco Global Markets Limited.