Harry was promised the chance to earn £10,000 a month as a carbon credit trader. Reality proved somewhat different...
An email arrived from a sender I failed to recognise. It was one of those addresses with initials followed by numbers – like abc123@whatever. Ignore it?
No. It was headed “Carbon Credit Trading Schemes”, one of the most evil scams around. He claimed to have information that “could be useful”. There was a real name and a UK phone number.
I dialled the number.
To my surprise, a real person answered, called Harry, an American who had read my lovemoney.com stories on how carbon trading scams had largely replaced landbanking - some landbankers had moved straight from pushing low quality land to pumping up low quality carbon deals.
Aged 23, he had come to Europe in late 2010 from his Indiana home, out of a spirit of adventure and because he had broken up with his long-term girlfriend. He found work in the UK financial sector. He was unwilling to specify details, but I did not push him. In May 2011, he lost his job – redundancy as he put it.
So where does a young, and probably hard up, American turn for a job? Where does he search? Obviously, on an advertising site where they post situations vacant without questions. He found an ad for “commodities brokers.”
Building a living on commission
“The job promised potential earnings of £10,000 a month – that sounded fantastic and far more than I had been earning. Of course, it was all commission. And yes, I did think this was too good to be true but I was not asked for any money upfront,” he told me.
So he sent his, admittedly thin, CV to an address in one of England's leafier counties. The reason for this location will become evident later on.
He was, no surprise here, offered a job as an “outsourced carbon credit broker”.
“The earnings promised were very high, so I was sceptical. I did my due diligence and a proper investigation on the company. The firm was registered as a limited company in England and it had a decent enough website so it sounded right and proper. However, I had no idea what a carbon credit broker did, outsourced or otherwise.”
He joined the firm in July. “Everything appeared to be on the up and up, the company was in a position of full disclosure and I was admittedly impressed with their professionalism.”
He also admits that he needed the money. “I had no other options. After all, as an American I have no right to work here without paperwork and permits – UK immigration thought I was merely a tourist, a status that bans employment.”
The commission was a massive 40% of everything he could sell. How could his employers offer so much? Because the credits sold to the private client cost at most 10p each and would be sold on for £10 – one hundred times as much.
Working from home
So where was the office? In Harry’s bedroom.
“The boss told me that everyone worked from their homes. I did not need to know anything about carbon trading as everything, including the details of potential investors and exactly what to say, would be emailed to me. I had to tell customers that I was in a green corner of England – the boss had decided that this has the right environmental and ethical credentials while giving a City of London address would not be as convincing.”
Harry lived most of the time in Italy, contacting investors over Skype, and nearly always slavishly following the script. He used lines such as “Barclays Capital and Morgan Stanley are getting more involved in carbon credits and professing the benefits to investors” which were almost identical to all the other carbon credit sellers.
The penny drops
However, by late October, he had found the lovemoney.com warnings.
“I did feel odd because of the reaction of some of the people I phoned – they were really aggressive. So I started to search the internet, finding all sorts of stuff that screamed scam. I was also worried because I had not been paid. I had sold about £200,000 worth of credits for which I should have received £80,000. I was really broke, living on cheap food, staying on a friend's floor and trying to persuade my family in the US to send money. I started to get annoyed.”
"So when I was told in November by a representative to "not rock the boat, we are under heat from the FSA", I decided to look into things a bit further and quickly came to the conclusion, that it was all a scam. I suppose that thought had been there quite a long time."
Harry quit the company. He says he was never paid the promised £80,000.
“When I realised that this was a scam, I started to feel guilty about the investors. But I confess that I might have carried on if I had received all
that money.”