Emerging trend of car park investment scams
It said the methods used by those selling car park investment scams are similar to those used by businesses selling unregulated investments including diamonds, wine and carbon credits.
Common features include unsolicited calls, verbal and written promises of a guaranteed and questionable high rate of return and the offer of a ‘buy-back’ provision. These offers come with no guarantee of an onward sale, as with timeshare properties.
The NFIB warned that some consumers have received an initial dividend payout as an introductory incentive, but there is no guarantee of long term future dividends.
It suspects these dividends are paid out from the investments of subsequent investors, in a manner akin to Ponzi schemes. Some cold callers have fraudulently claimed to be representatives of estate agents, selling parking spaces already owned by another party.
The Bureau is warning consumers never to enter into an agreement as the result of a cold call or unsolicited mail, and urge those considering making any financial investment to seek independent advice from a Financial Conduct Authority regulated source. Any money given to an unauthorised firm is not covered by the the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.
Commenting on the news, Tom McPhail, head of retirement policy at Hargreaves Lansdown, said that while the pension freedoms had “undoubtedly been a good thing”, the lure of large sums of newly accessible pension money is “inevitably” attracting unscrupulous fraudsters.
“Like other scams such as property development, overseas investments and storage pods, the sales pitch can sound seductive. Investors should never trust cold-callers and critically, they should only deal with regulated businesses. FCA regulation gives investors the security of dealing with a well-managed business, as well as a compensation scheme if something goes wrong,” he said.
“We would like to see a more robust distinction made between FCA supervised businesses selling regulated investments, which very rarely result in poor outcomes for investors, and these unregulated salesmen who seem to be able to operate with impunity. Policymakers should look at developing a kitemark or logo for regulated businesses and investments to help potential victims to identify a possible scam. This would send a clear message that if you buy an investment without this logo, it could be a scam and would be at your own risk.”