'Callous' firms in carbon credit scam shut down
A web of firms that sold carbon credits to vulnerable investors at inflated prices has been shut down in the High Court on grounds of public interest.
Eco-Synergies Ltd bought credits for 65p each, selling them to investors via other firms for up to an 869% profit.
A carbon credit is a tradable certificate that allows a company to emit a tonne of carbon dioxide.
The Insolvency Service, which brought the action, said investors "were offered hot air by callous" people.
The credits were sourced by Eco-Synergies at a cost of £2.3m and then marketed, using false and misleading claims, through 12 companies and raised a total of £19m.
Chris Mayhew, company investigations supervisor at the Insolvency Service, said: "The credits were sold at such inflated prices that an unnatural increase in value would be required before investors could break even, let alone see a return on their investment.
"Essentially, investors including vulnerable individuals - and often repeat victims who were urged to buy more and more credits - have lost their money.
"I would urge anyone cold-called and offered hot air by callous individuals to simply hang up the call."
Eco-Synergies used lavish brochures calling itself "the voluntary carbon specialists" and claiming to be a carbon market pioneer.
It provided bespoke assistance to the companies selling the credits, offering to train their staff in how to sell them to the public.
Its brochure claimed that the firm had a monthly turnover of more than £5m and had spent £200,000 on legal fees to ensure its system and contracts were "watertight".
The Insolvency Service estimated that "hundreds, possibly over a thousand, individual investors [have been] affected by the 13 firms".
These latest cases take the total number of carbon credit firms closed by the Insolvency Service to 32.
In the last two years, 19 other companies have been closed down after taking nearly £24m from over 1,500 investors.