The case of Asset Land v Financial Conduct Authority is a victory for consumers because it recognises the issues that consumers have faced when dealing with ‘land banking’ companies and how difficult it can be for a consumer to reclaim their money .The case is important as it identifies the need for investors in these types of schemes to have control of their investments, something which investors of many plots of land in ‘land banking’ schemes did not have. Many land banking schemes, including those offered by Asset land, are usually unauthorised investment schemes and, by the time consumers realise that there is an issue with their investment, the company has either ceased trading or disappeared. Asset Land was one of many companies offering ‘land banking’ and we are keen to hear from you if you have invested in a ‘land banking’ scheme.
What is ‘land banking’ and why is it controversial?
Over the past few years many consumers have been caught up in ‘land banking’ scams. These are scams where sales people often make over inflated promises that plots of land that their companies own are good investments not to be missed by consumers. Usually prospective consumer investors are told that the land they are being offered to invest in is guaranteed planning permission for development and that development companies are ready to snap up the land to use in the course of their business. The basic premise is that the value of the land will increase once developers decide how to best use it, leaving the initial investors the opportunity to sell the land for a nice, tidy profit.
These representations regarding the land are often supported by extensive marketing literature which promises exceptional gains for little investment. Consumers would often be subject to pressure selling and various other aggressive sales tactics which would usually result in a deposit being taken, commonly on a credit card.
Once the plots of land had been sold to the consumer, there would be no immediate expectations on behalf of the consumer as the terms over which financial gains were said to be expected were such that it would be 3-5 years before a consumer should expect any return on their initial investment. However, after 3-5 years the consumers were in for a shock; not only were the plots never actually guaranteed to get planning permission, but often the companies had gone insolvent by the time consumers caught on to the fact that the investments were perhaps not all they were made out to be.
In a huge amount of investment schemes involving ‘land banking’, misrepresentation on behalf of sales people was rife and consumers were often left with no course of redress and left considerably out of pocket with no way of claiming their money back.
Our work at Howlett Clarke
We have successfully represented a vast amount of consumers in reclaiming money paid for plots of land under ‘land banking’ schemes. Consumers are protected by Section 75 of the Consumer Credit Act 1974 in certain circumstances, and here at Howlett Clarke we have the expertise to assist consumers in reclaiming their money through Section 75.
Section 75 of the Consumer Credit Act allows a consumer to seek redress from the credit card provider (usually a bank) where the consumer has been subject to either a breach of contract or misrepresentation by the supplier – in these cases usually the supplier of the plots of land. Section 75 is not straight forward, and care should be taken before launching legal proceedings against a bank, however if you have purchased a plot of land which was subject to guarantees and which was sold with a promise of planning permission you may have redress through section 75 if you used a credit card (not debit) to pay the deposit or balance. You may be able to recover all of the money you have lost, plus interest, from the credit card provider under section 75(1) Consumer Credit Act 1974 – a result we have achieved for our clients on numerous occasions.
If you have been caught up in a ‘land banking’ scheme and used credit to purchase plots of land then we may be able to assist you. Whether you have experienced difficulties in reclaiming your money, or thought that you could not reclaim any money then get in touch with us to speak to one of our specialist advisers and see if we are able to help you claim your money back. Call us today on 01273 327272.