Another day, another set of victims, falling prey to an land investment scam, this time in the sunny climes of Brazil.
The BBC has reported that hundreds of British investors have lost millions of pounds in an investment scam.
Between 2010 and 2013, the victims were convinced to buy parcels of land in Brazil, by a London-based firm of property brokers called Pantheon Realty Consultants.
They were told this land would rise in value as a result of the World Cup, Brazil Olympics in 2016 and the strong economic growth in the country.
Victims invested an average of £10,000 in the land, which of course turned out to be worthless.
Pantheon Realty Consultants filed for insolvency at the end of last year.
Why were people scammed?
It’s worth looking at some of the reasons why people were scammed out of their life savings by this land banking scam.
Firstly, investors were disappointed with the low returns they could achieve by investing in more traditional asset classes in the current economic environment.
Sure, in times of low interest rates the yields available from cash, bonds and UK property are bound to be disappointing low, but they do at least offer some security.
Secondly, Pantheon did a good job of promoting an air of respectability.
They had a correspondence address in the insurance district of London, at 30 St Mary’s Axe, the Gherkin.
They also claimed membership of the Association of International Property Professionals (AIPP).
These are both steps fraudulent companies can take to enhance their credentials; the nice website, glossy brochure, posh office address and sharp suits are there for a reason.
Finally, they promoted a very topical investment; there is a lot of buzz around Brazil at the moment due to the World Cup, Olympics and its economic growth as an emerging market.
Be aware, stay safe
Investors need to be aware of these scams and avoid them at all costs. You will lose everything if you get involved.
Stick instead to taking investment advice from firms which are authorised and regulated by the Financial Conduct Authority. Invest in mainstream investment assets which offer known risk and reward profiles.
Most importantly, always link any investment decisions you make to your own financial goals and objectives.
The fastest way to determine whether an investment recommendation is a scam is the absence of any real focus on you, the investor.
If the slick salesman is droning on about the investment scheme, its potential rewards and how little time you have to take advantage of such an amazing ‘opportunity’, walk away.
