Government and charities have warned that elderly or vulnerable investors might be tricked in buying potentially worthless carbon credits.
Carbon credits are certificates that allow companies or individuals to emit one tonne of carbon dioxide (CO2) and trade it on the international emission trade market. They were introduced during the Kyoto protocol, in an effort to mitigate the amount of greenhouse gases emitted in the atmosphere.
More than 1,000 small investors have been convinced to buy carbon credits by some financial firms for a total of £24mand the government’s Insolvency Service has shut down 19 companies in relation to the scam, including Eco Global Markets Limited.
A 90-year old saver told the BBC he was convinced to buy £60,000 worth carbon credits with his retirement savings, two years ago. He said he never received paperwork and believe they targeted him because he was old.
Meanwhile, in a blog post for Blue & Green Investor in March, Mark Hoskin of Holden & Partners wrote, “Today I was called by a man who had invested £140,000 into voluntary carbon credits. He wanted to know how to sell these now. There is no way to sell these. They are not investments. He has lost £140,000!”
A total of 1,500 people – many of whom are elderly – were deceived by financial firms. Carbon credits are usually not available to small investors.
Consumer minister Jo Swinson said, “This is a particularly disgraceful 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 August, the Interpol revealed that a lack of clarity and regulations around the carbon trading market had made it an easy target for criminals, who tried to sell carbon units that did not exist or manipulate measurements.