Isra-Mart srl: FSA warns against carbon trading scams

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The Financial Services Authority (FSA) has urged investors to be on their guard against carbon trading scams after hearing about a growing number of firms touting dubious sounding schemes.

The City watchdog issued an alert this week to people being approached by companies promoting carbon credit trading schemes, either by cold calling, email or in person.

Despite noting that some firms may offer genuine investment opportunities, the FSA is concerned that investors will be sold fake credits or lose money by investing without understanding the risks.

"We're just asking people to be alert," an FSA spokesman told BusinessGreen. "It is possible to sell them legitimately, but some are being sold in less than desirable circumstances, such as boiler rooms [high-pressure salesrooms], using it as the latest way to make money."

Certified emission reductions are normally traded by governments and large corporate entities, so are highly unlikely to be offered in small volumes to consumers.

However, voluntary emission reductions (VERs), offered through schemes such as forestry or solar panel projects, are increasingly being promoted to UK investors.

The FSA said that anyone approached should be wary of VERs certificates labelled as 'certified', because there are a wide range of bodies and quality standards not recognised by any UK financial compensation scheme.

Also, projects generating VERs are usually based overseas and the UK authorities have no way of controlling the quality or validity of the scheme, the regulator said.

The FSA is urging anyone who is concerned that they have been scammed to get in touch.