Consumers warned over rare earth metals schemes scam
Rare earth metals are the elements used in computers, mobile phones and batteries
Consumers are being targeted by schemes offering the chance to make money from rare earth metals, the City watchdog has warned.
In an alert issued yesterday, the Financial Services Authority (FSA) said investors should be wary of investing in schemes involving rare earth metals, which are the chemical elements used in the manufacture of products like computers, mobile phones and batteries.
Many of the schemes are fraudulent, promoting investments that are not regulated and often don’t exist. The scams are on the rise however, with more people falling victim to the high-pressure sales tactics employed by the firms. Some have also been involved in unregulated investments such as fine wines, overseas land and carbon credits.
The FSA warned of a “strong possibility of fraud” as rare earth metals investments are unregulated, hard to sell on, can lead to the capital being lost entirely because of the difficulty of confirming their existence.
Investors in unregulated schemes have no recourse to the Financial Ombudsman Service or the Financial Services Compensation Scheme.
The FSA urged investors to treat all investment sales calls with suspicion and check its register – at http://www.fsa.gov.uk/fsaregister - to see if the firm is authorised.
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