Scams in overseas farm, land or property deals

Some firms offer investment deals in agricultural land, overseas property, or crop schemes where you are offered a plot in a plantation scheme where the harvests in the form of agricultural commodities determine your returns. These harvests can be biofuels, teak trees, paulownia, etc. The returns offered in such schemes range from 15 to 25 per cent, and it is normally claimed that risk in such investment is very low.

The investment term in such plantation or farming projects can be up to 5 years, and the earning from the plot and crops sold on your behalf is given to the land owner.

The price of each acre plot is excessively low, and the investors may own many acres on investment.

The firm contacts the buyer through untraditional mechanisms such as seminars, exhibitions, and emails, and they use aggressive marketing to attract more potent clients. They may promote their plans by adopting high-pressure techniques and diverse sales methods. They mostly claim they do not need FCA authorization as they are not offering CIS.

How do we prevent such deals?

FCA does not back such investments in crops, forestry, plantations and land, and one cannot seek compensation for the loss of money in such deals through authorities.

The firms offering such deals may not have access to FOS and FSCS if the money is completely lost.

Even the legalities of such deals are very complex as they involve two countries' regulations, and the terms and conditions may or may not be categorized as CIS.

The loopholes of such deals are – you do not have access to your property and cannot go anytime to look for the plot or the crops. The schemes involve investment pooling, where the operators may manage the scheme completely or give it to local operators.  

The case of such investment deals can be referred to Trading Standards or BEIS or the legal authorities.

What if invested?

Firstly, one should not feel hassled to invest in such schemes. Seek financial advice to invest and make sure the government authorizes the firm. Check government organizations which can represent as advisors and reduce the risk of loss.

If you have invested and cannot get back the money, contact the consumer helpline or report the matter to the authorities online or offline. Most investments in overseas agricultural land and farms are not under the FCA, and complaints under such schemes cannot be managed through the FCA compensation schemes.

If the sellers call for future investment or follow-ups where they claim to get you the money back or offer a lucrative Exit plan after a small payment, inform authorities immediately.