Find out how overseas property and crop schemes work, how to avoid scams and what to do if you are scammed.
Overseas property and crop schemes may offer for you to buy a plot on a plantation that harvests agricultural commodities such as teak trees, jatropha, paulownia and biofuels.
The investment is usually stated to be low risk but promising high, often guaranteed returns of around 15–25%.
The investment period is typically about five years, after which your plot will be harvested and sold on your behalf and the profits forwarded to you.
We are aware that scammers are targeting consumers searching for investments online, in particular through search engines like Google and Bing. Although some scammers offer high returns to tempt you into investing, they may also offer realistic returns to make their offer appear more legitimate. Those offering or promoting products or investment opportunities found through search engines are not necessarily authorised or regulated by the FCA. You can check the FCA Warning List for firms to avoid.
How overseas property and crop scams work
Investors are usually called out of the blue, but contact can also come by email, post, word of mouth or at a seminar or exhibition.
Promoters often use aggressive, high-pressure sales tactics, and claim they don’t need to FCA-authorised because they’re not collective investment schemes (CIS).
How to protect yourself
The FCA does not regulate the sale of land, trees or crops.
However, many overseas land and crop schemes operate (or claim to operate) as a collective investment scheme (CIS), which we do regulate.
Determining whether a scheme is a CIS or not is often a complex, legal matter. Broadly speaking, the characteristics of a CIS include:
- investors don’t have day-to-day control over managing their plot
- the scheme involves pooling investor funds
- the operator is responsible for managing the scheme as a whole
In these cases, we may be able to refer it to Trading Standards, the Corporate Complaints Team at the Department for Business, Energy, Industrial Strategy (BEIS)or the police.
Always be wary if you’re contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.
You should seriously consider seeking financial advice or guidance before investing. You should make sure that any firm you deal with is regulated by us and never take investment advice from the company that contacted you, as this may be part of the scam.
The Money Advice Service has information on investing and about how to find a financial adviser. Alternatively, you could get further information from a group that represents advisers such as PIMFA.
Read more about how to find an adviser.
If you have been scammed
Because overseas land and crop schemes are not regulated by the FCA, your investment is not protected by the UK’s Financial Services Complaints and Compensation Scheme.
If you have already invested in a scam, fraudsters are likely to target you again or sell your details to other criminals.
The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.