Beware of the scam known as Landbanking

Landbanking is the scam where you are offered the chance of earning some quick money by buying undeveloped land in the hope that you can then sell it on, sometime in the future, to a large company such as a supermarket and make a huge profit. The firms that offer you these deals will lead you to believe that the land you are buying is sure to be snapped up by a big business for development.

The truth is a lot different. The land that you buy is normally on green belt land or in areas of natural beauty and has building restrictions on it so is consequently worthless. In the worst cases the land doesn’t even exist. The firms that deal in landbanking play on the greed in all of us with the promise of making a quick fortune that unfortunately never materialises.

This week in the High Court the City watchdog, the Financial Services Authority, won a £32 million judgment against three firms involved in landbanking. The judgments were against James Kenneth Maynard who ran two firms under the names of Regional Land and Countrywide and Wasim Minhas who was director of a firm named Plateau.

Maynard was banned from selling land for business purposes for life and ordered to pay £31,896.194 to the FSA. He was also made bankrupt but is believed to be living in Northern Cyprus at the moment. Plateau was ordered to pay £918, 975 to the FSA and Minhas personally £75,000 to them. Plateau is now in liquidation.

This may act as a deterrent to some of these unscrupulous firms but there will always be others ready to take their place. If you wish to invest in land always have it independently valued first and you can check the firm selling it is authorised by the FSA. Their helpline number is 0845 606 1234.