2018 has seen a fresh wave of scam investment scheme complaints received by the police and the Financial Conduct Authority (FCA). This time the spotlight is on airport parking schemes. If you have invested in an airport parking scheme either as a standalone investment or via a SIPP, your hard-earned cash might be at risk.
Does the following scenario sound familiar?
Ever since the government introduced pension freedoms reforms in 2015, pension savers have been targeted by cold callers. They often use ‘get rich quick schemes’ involving airport parking spaces.
Unscrupulous financial advisors and cold call ‘introducers’ used the reforms as an opportunity to prey on unsuspecting savers. Often using forceful and pressure sales tactics they persuaded them to move their pension savings into SIPPs. Some of the money was invested into airport parking schemes.
Investors were then sold individual parking spaces near airports for around £25,000 per space. These were sold with the promise that they could then lease them out to tenants for a profitable rental yield of around 8% plus a convenient buyback scheme. Buyers were usually management companies, which then sublet to customers.
“It’s just like buying a house”, many sellers said. But this simply isn’t accurate. When you buy a house as an investment you can physically see the property. With an airport parking space it’s almost impossible to prove you actually own anything at all.
The risks of airport parking schemes
The returns and convenience all sound very attractive to begin with. However, many of these so-called ‘guaranteed returns’ have never been seen and the schemes turned out to be scams. Here are the reasons why airport parking schemes are so risky:
An unregulated investment – Most airport parking investment schemes, along with self-storage units and overseas property, are unregulated by the FCA. This means that your money is not protected if your investment makes a loss or if it turns out to be a scam.
Buyback schemes offer no guarantee – You may have the option of a buyback scheme if you want to sell your parking space on. However, there is no guarantee that you will find potential buyers or that you will make an onward sale.
Difficult to exit – Once you’ve handed over your money it is unlikely you will hear much from your investment company. Contacting them later down the line to discuss your investment, access your funds or sell on your parking space can prove difficult or even impossible.
Heavy fees – Even if you do manage to get in touch with your investment company to access your financial returns, the process for doing so carries heavy fees. This can often mean you end up making a loss on your investment.
Airport parking SIPP mis-selling
If you were sold a SIPP which included airport parking space investments, it is highly likely this was mis-sold to you. The pension freedoms reform has meant that high risk investments can now be sold to everyday retail customers. They likely have insufficient investment experience, as opposed to professional, risk-savvy investors. If it is discovered that your SIPP was mis-sold you could be eligible for compensation.
Your airport parking SIPP was mis-sold if:
- An adviser pressured you into buying the investment.
- You are an inexperienced investor with insufficient net-worth (less than £100,000 annual income).
- Your financial adviser did not inform you of the risks involved.
If any of the above apply to you, or if you’re still not sure if you are due compensation, get in touch with our team of solicitors here at APJ. We will provide you with clear, transparent advice.