The Financial Conduct Authority has issued a warning to consumers over a growing number of high-risk investment schemes linked to holiday parks, lodges and holiday homes that are being promoted unlawfully in the UK.
The regulator said it has identified an increase in companies marketing investments in holiday accommodation despite not being authorised by the FCA.
In many cases, these arrangements may constitute unregulated collective investment schemes, where multiple investors pool their money in return for promised income or capital growth.
Such schemes fall outside the FCA’s regulatory perimeter and can expose investors to significant financial risk.
OUTRIGHT SCAMS
The watchdog warned that some offers may be outright scams, while others may be structured in a way that leaves investors with limited control over their money and little clarity on how returns are generated.
The FCA stressed that consumers who invest through unauthorised firms are unlikely to have access to key protections if things go wrong.
Investors typically cannot refer complaints to the Financial Ombudsman Service or make claims through the Financial Services Compensation Scheme.
FIXED RETURNS
Holiday park investments are often marketed with promises of fixed or “guaranteed” returns, long-term income and asset-backed security.
But the FCA cautions that these claims can be misleading and may not reflect the underlying risks involved.
The regulator urged consumers to carry out checks before committing any funds, including using the FCA’s Firm Checker to confirm that a company is authorised and has permission to provide the relevant services.
It also advised investors to be particularly wary of unsolicited approaches and pressure to invest quickly.
The warning comes amid broader concerns from the FCA about the promotion of high-risk investments to retail consumers at a time when falling interest rates and economic uncertainty are driving demand for alternative income-generating assets.
