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Land banking fraud

Getting To Know

What is land banking fraud?

Land banking fraud is a type of investment scam that suggests investors will create profit from investing in a small plot of land on a field close to towns and villages simply because developers will see the area of land as desirable for housing and to be zoned out for development. This, of course, sounds legitimate, but the individuals who are responsible for land banking fraud are purposely buying large plots of land and selling small subsections to multiple investors to surpass their investment and profit themselves the investors. Land banking schemes use sales tactics to suggest that once each plot of land is approved for planning permission, the value of that plot will hike up, ultimately offering investors large returns.

This unfortunately is not the case for land banking fraud, as often the plots of land that are individually sold are green belt land, meaning that no developments will be approved to take place. Scammers intentionally sell plots of land knowing that the investors will be losing their investment and have no opportunity to generate revenue. The land is practically worthless, and people who have been subjected to the scam only realise when it is too late.

As investment fraud lawyers, Wealth Recovery Solicitors are experienced in recovering the lost funds of investors who have fallen victim to land banking fraud. Although land banking fraud was taking place on a much larger scale 10 years ago, there are still unsuspecting investors who are falling victim to this tactful scam. Investors fail to receive the promised return on investment or dividend from the scammers before the payment was made, ultimately leading to a loss and no support from the salesperson who introduced the investment in the first place.


How to identify land banking fraud

Can land banking be legitimate?+

Land banking can be legitimate, however with millions of pounds still being lost to land banking fraud to this day, investors must act with extreme care and caution before they trust anyone who is claiming to maximise finances with land banking. Land banking is legal, but investors should be aware that they may be investing in small plots of agricultural land that do not have any sort of approval from the local council for planning permission, leaving the land worthless until the council or authorities decide to change their policies or remove the green belt restrictions, which is not likely.

What is green belt land?+

Land banking scams are made to fail from the beginning. Scammers who set up land banking investment schemes buy large agricultural fields which are mostly green belt land. Green belts are used as designated areas to separate areas of fast growth and urban development from areas of the countryside to maintain balance and prevent an excessive sprawl of developments. This prevents any use of green belt land for development, which ultimately puts unsuspecting investors out of pocket once they pay for their plot of land, after being under the impression that their land will attract developers and increase its value in a promised time frame.

The signs of land banking fraud+

Land banking fraud has some telltale signs:

  • High-pressure sales tactics will be used to entice you into making this investment. It will be made to sound lucrative and also a limited-time offer.
  • They will advise against consulting with legal officials to decide to invest. They will make you feel more empowered and entrepreneurial by making this decision by yourself.
  • High returns will be promised with exact time frames as to when you should expect the planning permission to be approved, and then claim it is out of their hands when there is no planning permission accepted on the plot of land.
  • If you have been targeted as an investor looking for alternative forms of investment through your searches and queries online. This may result in cold calls and emails from an unknown person introducing the concept.

If an investment with land banking sounds too good to be true, it usually is.

How can I avoid land banking scams?+

If you are looking to avoid land banking schemes, there are many things you can do to check the credibility of the investment. First of all, you can check with the local authorities within the vicinity of the plot of land you are investing in as to whether planning permission is likely to be approved. Make sure that you obtain the contact details yourself, and do not trust the details of the salesperson pitching the investment strategy. You can also spot a land banking scam if you have had unsolicited contact from the person selling the land banking scam, therefore it should be avoided at all costs.

Is land banking illegal?+

No, land banking is not illegal. Land bank schemes are, however, often unregulated, leaving investors at risk of having their financial inputs taken away from them, not to be returned by the scammers who set up the initial scheme. To protect yourself from land banking fraud, you need to spot the telltale signs that they are selling a scam. This may involve being pitched by a pushy salesperson, making promises of low investment and high returns.

How might I get targeted with land banking fraud?+

People trying to conduct land banking fraud on investors find vulnerable targets in several ways. First of all, they might introduce themselves as legitimate investment brokers at investing networking events, dropping the seed for vulnerable investors who haven’t heard of the scheme before. Also, scammers create websites that seem to look legitimate for getting started in land banking, and they entice investors with promises and fake reputations. You should always check that such businesses are listed with the relevant regulatory standards before considering investing in them.

Victim of a Scam?

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We understand that being the victim of a land banking fraud can be tough to handle, but we hope that our support, action and guidance can enable you to recover lost funds and regain a sense of confidence and security in making trades and investments online.


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