Land banking fraud

The National Fraud Intelligence Bureau (NFIB) is warning the general public how to spot land banking fraud. [4 March 2011]

Land banking fraud is where investors are led to believe they are investing in land that will significantly increase in value through:

• plots being in areas with high house prices
• government intention of a general increase in housing
• close to land that has been allocated for development.

In reality investors are sold land which:

• has no/very little development potential
• is very unlikely to be granted planning permission in the foreseeable future
• does not exist
• does not belong to the seller.

Like many investment frauds – such as boiler room fraud - the sale often takes place through high-pressured telephone calls, although it can also be through mail shot, brochure distribution or websites.

Beware of land banking fraudHundreds of people have already reported this fraud, but the total number of victims is likely to run into thousands.

The NFIB is currently undergoing an assessment of all intelligence held in relation to land banking frauds. Initial research suggests there are commonalities between business representatives, company contact details and modus operandi. It is also assisting detectives with a number of ongoing land banking fraud investigations. Recent NFIB intelligence led to a City of London Police investigation into Browne & Mackenzie. Detectives have now made four arrests and identfied 90 victims with losses running to £3 million.

The NFIB advises members of the public not to respond to investment opportunities through cold-callers. It also advises people to question how they are being offered such high returns – if it seems to good to be true then it often is. Anyone thinking of going ahead and investing should first:

• contact the council to check the person or company who they are told owns the land, actually owns the land
• check if the land has a planning permission or is likely to ever get one in the future
• carry out an Internet search on the company’s name, directors and contact details

For more information on land banking fraud, visit the NFIB's website.

Please note: Action Fraud is not responsible for the content on external websites.

To report a fraud, call Action Fraud on 0300 123 2040 or use our online fraud reporting tool.

See also:
Victims of land banking scams should report to Action Fraud
Land banking scams
Boiler room fraud