A company selling carbon credits worth £1.7m to the public as an investment was wound up by the High Court for using misleading and high-pressure sales tactics.
Foreco Growth Investments Limited was wound up on 12 June 2013 following an investigation by The Insolvency Service.
David Hill, investigation supervisor at The Insolvency Service, said: “These companies could not support their exaggerated claims and many who feel for their slick patter ended up losing out.
“The Insolvency Service will take action against and put out of business, companies that set out to rip off honest investors.”
The investigation found that during an 18 month period the company received over £1.7m, mainly from the general public, for the sale of Voluntary Emission Reduction (VER) credits, also known as carbon credits.
The investigation also found that Foreco:
• misled the public by claiming to be “a leading consultancy specialising in supporting ethical and socially responsible projects”;
• used high-pressure sales techniques to target potential investors;
• applied excessive mark-ups on the carbon credits resulting in a higher than necessary price for the ‘investments’;
• failed to help customers make onward sales of the carbon credits as there was little or no prospect of resale; and
• claimed to comply with Financial Services Authority (now the Financial Conduct Authority) regulations while not doing so.
Registrar Nicholls, who heard the case, ruled the carbon credits were not an appropriate investment as they could not be sold without significant loss in value.