Land banking can be legitimate, however with millions of pounds still being lost to land banking fraud to this day, investors must act with extreme care and caution before they trust anyone who is claiming to maximise finances with land banking. Land banking is legal, but investors should be aware that they may be investing in small plots of agricultural land that do not have any sort of approval from the local council for planning permission, leaving the land worthless until the council or authorities decide to change their policies or remove the green belt restrictions, which is not likely.

If you are looking to avoid land banking schemes, there are many things you can do to check the credibility of the investment. First of all, you can check with the local authorities within the vicinity of the plot of land you are investing in as to whether planning permission is likely to be approved. Make sure that you obtain the contact details yourself, and do not trust the details of the salesperson pitching the investment strategy. You can also spot a land banking scam if you have had unsolicited contact from the person selling the land banking scam, therefore it should be avoided at all costs.

People trying to conduct land banking fraud on investors find vulnerable targets in several ways. First of all, they might introduce themselves as legitimate investment brokers at investing networking events, dropping the seed for vulnerable investors who haven’t heard of the scheme before. Also, scammers create websites that seem to look legitimate for getting started in land banking, and they entice investors with promises and fake reputations. You should always check that such businesses are listed with the relevant regulatory standards before considering investing in them.

Loan fee fraud: You’re accepted for a loan, but before it’s “approved”, you’re asked to pay a fee for insurance, processing or an admin charge. Once paid, the loan never arrives, and the scammer disappears with your funds.
Job scams: You apply for a job and are told you’ve been successful. But before you can start, you’re asked to pay for background checks, training, or admin costs. Once paid, the job offer vanishes, and so does the scammer with your money.
Social media competition: You’re told you’ve won a prize in a competition, perhaps one you never even entered. But to claim it, you need to pay a small fee for delivery, verification or admin. After you pay, the prize never arrives because the competition was fake.
Rental property scams: You find a great rental property online. The “landlord” asks for a deposit to reserve it, often claiming there’s a lot of interest or that you can’t view it in person. After you send the money, the property turns out to be fake — or already rented to someone else.

No, land banking is not illegal. Land bank schemes are, however, often unregulated, leaving investors at risk of having their financial inputs taken away from them, not to be returned by the scammers who set up the initial scheme. To protect yourself from land banking fraud, you need to spot the telltale signs that they are selling a scam. This may involve being pitched by a pushy salesperson, making promises of low investment and high returns.

Land banking fraud has some telltale signs:

High-pressure sales tactics will be used to entice you into making this investment. It will be made to sound lucrative and also a limited-time offer.
They will advise against consulting with legal officials to decide to invest. They will make you feel more empowered and entrepreneurial by making this decision by yourself.
High returns will be promised with exact time frames as to when you should expect the planning permission to be approved, and then claim it is out of their hands when there is no planning permission accepted on the plot of land.
If you have been targeted as an investor looking for alternative forms of investment through your searches and queries online. This may result in cold calls and emails from an unknown person introducing the concept.
If an investment with land banking sounds too good to be true, it usually is.