GQS Solicitors

Land Banking Fraud

What is Landbanking? A Landbanking fraud scheme is one in which land is usually purchased with the intent of holding onto it until such time as it is profitable to sell to others for more than was initially paid. The value of land may increase upon the supposed exercise of an option to develop, planning permission, downgrading of greenbelt land to brownbelt land, or less, conversion for use as housing, and/or potential extraction of raw materials.

They can be found in a number of areas, but more particularly within sight of an already expanding and developing town, or regeneration development.

Is all Landbanking illegal?

No it is not. There are many genuine Companies set up for you to invest monies on speculation. If the speculation is worthy, and an independent value confirms the value of land, then all well and good: In such circumstances a landbanking scheme may well be legal because the information stacks up, and the returns are modest rather than proverbially ‘pie in the sky’.

Why are people attracted? In this age of uncertainty that we live in, people look for tangible assets. One always thinks that bricks and mortar will as a long-term investment substantially increase. Interest rates are not attractive to someone cash-rich who is dubious or uncertain to invest in other commodities such as stocks and shares. That person in such a position will perhaps take a risk on investment. Generally speaking, the younger the person investing, the more risk he/she is likely to take. Conversely, an older person, may not want such a high risk.

  • Attraction of fraudster to older victim:
  • The attraction is that older people are:
  • Volatile;
  • More likely to be hoarders of cash;

May be manipulated into parting with their life savings, justifying/rationalising it as not making any return sitting under the mattress, and being one-last flitter to make some bigger money as a legacy for their grown-up family;

More likely to be confused, or bamboozled into agreeing something under pressure, and a bombardment of telephone calls on the premise that the caller is ‘doing you a favour’.

How the Fraudsters work

This works in much the same way as a ‘boiler room fraud’. There will inevitably be a number of people involved in this scam. The more people supposedly in the loop, the more likely there is an attempt to lead you into a false sense of security by trusting and believing that the caller is genuinely trying to help you for the good of your family, and as a legacy to leave which is going to be substantially more than invested and a better rate of return than any Bank.

The way it works is based on your desire for a specific good or service. In this case, it is a commodity of land. You are being sold a dream. If it sounds too good to be true, then that is usually the case.

The initial caller seeks ‘You’ Psychology. They look for weak points in your story, and are fastidious in detail. You part supposedly honestly with your money to them, and you expect a huge return. In the m meantime, you have divulged the names of loved ones, that they can work on resolving.

The lack of supply in the market generally, and the possibility of you having something that others do not have, and making a profit, may be enough to spark a request. The main ingredient is the urgency to purchase land, and the pressure or boiler to buy now whilst ownership of Land appears not to be in dispute, or that someone else may take the deal instead, and unless you buy it up now, an opportunity to will be missed forever.

Possible people involved in the attempted landbanking fraud

Let me introduce you to some of the players in a Landbanking fraud scheme:

There will be the initial sales team which will consist of a ‘frontier’, a ‘closer’, and a ‘verifier’.

Then, there will be the next holiday rep, or perhaps the ‘Verifier’ who says that you have been miss-sold a LandBanking Scheme, but they will put things right for you. 2 to 3 weeks after the abortive transaction, you may become the owner of what is in reality a worthless piece of land, or alternatively a piece of land with no realistic options of being developed, or being worth considerably less than it actually is.

There is an urgency by taking immediate action, or else such offers to purchase for you, may not last and will go to someone else. You begin to trust them as an elderly person because after all, when did your grandchildren come to live with you, and you needed the company. The idea is to pressurise you to invest funds. Whilst under pressure, you become confused. You go along with what the ‘closer’ is saying because they have made the demand for landbanking irresistible not to snap up immediately, or else. Just before you think too much about it, the ‘Verifier’ will ask you some insignificant question, regurgitating perhaps your instructions, and things personal to you which play on your heart-strings, but assisting you only to lose track of your concern.

There may be a valuer, and perhaps a Solicitor in on the conspiracy to defraud you of funds. An Employee at your Bank may also be ‘in’ on the scam.

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