The seminar scam

A number of seminars currently in operation offer the chance to learn "how to become a property millionaire". Typically, investors attend a free presentation and are told they can learn how to deal in property starting with little or no capital.

Those who sign up typically pay thousands of pounds for the course. Schemes vary, but may involve the opportunity to buy blocks of properties as buy-to-let investments, or buying development properties at a discount, which have yet to be built. The companies may also offer no deposit finance deals to get the investor started. While a few people may have made a million, the vast majority are losing thousands of pounds.

The buy-to-let scam

Another variation is the buy-to-let property scheme, where companies offer to source, renovate and manage properties, claiming healthy returns will be made from rental income. In reality, the properties are often derelict and worth a fraction of the money paid for them, and the promised tenants are non-existent. Few investors see the returns they are led to expect.

The agricultural land scam

The company buys up farmland and subdivides it into plots suitable for reasonable size houses. These plots are then sold to investors at many times the purchase price without planning consent.

The company never actually says planning consent will be granted but issues copies of press releases and quotes that give the impression the government is about to change its policy.

It also draws up plans, like housing estates with proposed access roads etc, and agrees to make applications for planning consent. The land is also sold through independent agents over which the company has no control.

The downside is that people end up paying thousands for agricultural land with a value of a few hundred, which is then abandoned and becomes neglected.

Tips to avoid scams

The DTI says last year it caught 371 scam companies and wound them up and is warning others it is stepping up action to catch more. It is a sad fact however, that scams and rip-off money-making schemes continue to resurface in a number of different guises, usually taking advantage of people's good nature or desire to make a bit of money.

People should avoid providing personal or financial information until they are sure a company is legitimate, the DTI advises.

Other tips are to make sure you fully understand all the terms and conditions of any offer made to you and don't provide any financial or other personal information before you establish whether the company is legitimate.

Some of the scamsters run a slick operation and cannot be judged by how 'professional' they or their promotional material or web site seems. By the same token, says the DTI, don’t let embarrassment or fear keep you from reporting fraud or abuse to the local Trading Standards office.