A number of land banking companies have now been closed down by FSA/DTI action, having been found to be operating illegal collective investment schemes. Other land banking companies are currently being investigated by the FSA.

This leaves many plot owners in a very uncertain position. Are they entitled to any refund or compensation? Who will pay it?

The FSA has already issued guidance which says that land plot investors may have a statutory right to recover money and claim compensation for any consequent losses where illegal collective investment schemes have been in operation.

But plot owners may have difficulty in getting any money back from land banking companies even where liability can clearly be established because there may be insufficient collateral left after winding up these companies to pay any dividend.

However, it may be possible to claim against credit card companies where deposits on land plots were paid by credit card. This is because, should contracts for plot purchases be shown to be illegal, the credit card companies could be liable to refund investors under section 75 of the Consumer Credit Act 1974 since they have effectively lent money to investors to enter into these illegal contracts.

If you are resident in the UK, are the owner of a plot bought from one of the companies which has been closed by the FSA or is being investigated currently and you can demonstrate that you paid a deposit on your plot by a credit card issued by a UK bank, please leave a comment below including a working email address.

We'll try to put you in touch with someone who will be able to explore your options for you.