A company calling itself “Delta Financial Markets” is running a recovery room scam

Earlier this week, “Fallguy” left a comment on REDD-Monitor. “Has anyone had dealings with Delta Financial Markets Ltd?”, Fallguy asked.

A few years ago, Fallguy was scammed into buying carbon credits as an investment. He’s now on a “sucker list”. These lists are an important part of scammers’ operations. They consist of names, addresses, phone number and background information about people who have been scammed. They are traded between boiler room operations, because the unfortunately reality is that when someone as been scammed, they are more likely to fall for another scam.

Fallguy has received several offers to sell his carbon credits. Last year company called Novus Capital Markets cold called him. It was a ridiculously obvious recovery room scam.

Here’s Fallguy’s version of his conversation with “Delta Financial Markets”:

Had a call today from a George Peterson claiming to be from Delta Financial Markets Ltd and able to sell my carbon credits. He said they would have to be converted to EUAs for which there would be a 10% charge but that he has a buyer in France who wants 180,000 credits and he would be aggrregating the credits from a number of clients. He valued the CERs at about £7 each.

He also said that there would be no CC trading for 5 years after the end of 2017.

Legitimate or just another classic cold call scam?

And here are the red flags:

“Delta Financial Markets” cold called Fallguy

George Petersen cold called Fallguy. No legitimate company would cold call you with financial advice. The only way that Petersen had Fallguy’s phone number, and knew about his carbon credits is from a sucker list.

In August 2017, the government announced that it planned to make pensions cold calling illegal.

“Delta Financial Markets” is a clone of another company

There is a real company called Delta Financial Markets. It was incorporated in the UK in June 2010. Its registered with the FCA. Its website address is dfmarkets.co.uk. On its website, DF Markets explains that it is a “CFD and Spread Betting provider established and located in Canary Wharf, London”.

But George Petersen doesn’t work for this company. He works for a completely different “Delta Financial Markets”. His company’s website address is deltafinancialmarkets.com. On its website, Petersen’s “Delta Financial Markets” explains that it “securely houses all account and records of private individuals from banks and private financial institutes that sell and buy commodities”.

The company’s website was registered just over two months ago, on 25 July 2017. The website was registered anonymously.

The website consists of just five pages, and was obviously thrown together in something of a hurry. My favourite page is this one:

“Delta Financial Markets” cut and pasted text on its website from JTC Group

“Delta Financial Markets” website includes information about its Data management.

The text in the column on the left under the heading “Escrow Services” is cut and pasted from JTC Group’s website.

And the text in the column on the right, under the heading “How we work”, is cut and pasted from Escrow.com.

This is another give-away that “Delta Financial Markets” is up to something fishy. Genuine companies do not cut and paste the text on their website from another company’s website.

There is no way of converting carbon credits to EUAs

George Petersen told Fallguy that his carbon credits would be converted to EUAs, before being sold to a “buyer in France”. This is nonsense. There is no way of “converting” carbon credits into EUAs.

There are two types of carbon credits: compliance and voluntary. Compliance credits or Certified Emissions Reductions (CERs) are generated under the Clean Development Mechanism. They can be used to meet targets agreed under the UNFCCC. CERs can be traded on the EU Emissions Trading System.

Voluntary carbon credits, or Voluntary Emissions Reductions (VERs), are generated outside the UN system. The price of VERs has been falling steadily for years. In 2016, it reached an all time low of US$3.

EUAs are European Emission Allowances. These are pollution permits. Governments either sell them to companies, or hand them out for free.

Carbon trading company Vertis has a useful graph on its website that shows the price of EUAs and CERs since December 2016:

The current prices are as follows: EUAs, €6.89; and CERs, €0.19. George Petersen told Fallguy that he “valued the CERs at about £7 each”. The reality is that for £7 (€7.86) you could buy 41 CERs.

The carbon credits (VERs) sold to retail investors are worthless

In 2015, REDD-Monitor published a Guest Post about the carbon credits that boiler rooms sold as investments. It was written by a commodities trader with 30 years experience, who wrote:

In my professional opinion the credits sold to private individuals in the boiler room cases I have reviewed are worthless, I am not aware of a single individual in my 10 year career within the carbon markets that has sold on, for any economic worth, the VERs purchased from “boiler rooms” as investments.

There is no secondary market for VERs. They are a wasting asset – meaning the price falls of individual carbon credits falls over time.

Carbon trading won’t stop for five years at the end of 2017

Petersen told Fallguy that there would be no carbon trading for five years from the end of this year. Petersen’s motive for making this story up is obvious. It’s to put pressure on Fallguy to act quickly to sell his carbon credits. But that doesn’t change the fact that it is pure fiction.

“Delta Financial Markets” wants a 10% advance fee

Petersen told Fallguy there would be a 10% charge for converting carbon credits to EUAs. Petersen is asking for money for something that will never happen.

Here’s how Action Fraud describes this type of recovery room scam on its website:

If you’ve been a victim of fraud in the past, whoever took your money may keep your contact information and contact you again.

This time, they’ll pose as an organisation that has been made aware of your loss. They’ll claim they can arrest the fraudster, or even recover the money you lost. In either case, they say you’ll need to pay a fee first. This is a form of advance fee fraud; you’ll never get any money back.

If you pay, they’ll keep coming back to you with another cost that has to be paid, before your money can be returned.

If you ask them to take the fees from the money they claim to have recovered, they will give reasons why this isn’t possible. For example, they might tell you that your money is under the control of a court and can only be paid back to you by them.

The fraudsters may also ask you to provide details of your bank account so they can pay your money into it. They will use this information to empty your account.

Observant readers will have noticed that this post is very similar to the post I wrote in after Brian Carter from Novus Capital Markets cold called Fallguy. There are some minor differences, but nothing spectacular. Novus Capital Markets’ website has, of course, disappeared in the meantime.

The conclusion of this post is also pretty much the same as the one about Novus Capital Markets:

If you are cold called by “Delta Financial Markets” (or anyone who claims they can sell your carbon credits, or asks for an advance fee) please report them Action Fraud and the Financial Conduct Authority.