Most people who buy carbon credits want to balance part of their footprint. Scammers turn that intention into a sales pitch: credits sold as an investment, with returns that never arrive. Separately, regulators have found fraud inside the carbon market itself. This page covers both, with the warning signs regulators list and where to report.

It is part of our Quality section. For how to check a credit yourself, see how to verify carbon credits.

How carbon credit investment scams work

The UK’s Financial Conduct Authority (FCA) describes the usual pattern. Investors are usually called out of the blue, though contact can also come by email, post, word of mouth or at a seminar or exhibitionSource 1. They are offered carbon credit certificates, voluntary emission reductions (VERs), certified emission reductions (CERs), or a chance to invest directly in a “green” scheme that generates carbon credits as a returnSource 1.

The outcome is often the same: investors report that they can’t sell or trade their carbon credits and have lost the money they investedSource 1.

There is no protection to fall back on. The FCA says carbon credits are not currently regulated by it, so investors have no access to the Financial Services Compensation Scheme or the Financial Ombudsman Service if they want to complainSource 1.

Warning signs

Walk away if you see these

  • You were contacted out of the blue.
  • You are pressured to invest quickly.
  • You are promised returns that sound too good to be true.
  • Credits are sold as an investment to hold and resell, not to retire.
  • The seller can’t give you serial numbers or a public registry record.

The first three come straight from the FCA’s warningSource 1. The last two follow from how genuine credits work: when you buy credits to offset, they should be retired, after which they can’t be recirculated or resoldSource 5. A credit that is “yours to sell later” is not a credit you have used.

What a genuine purchase looks like

Buying credits to offset part of your footprint looks very different from a scam pitch:

  • You buy a number of tonnes, not a “return”. The price is per tonne, and nobody tells you the credits will rise in value.
  • The credits are retired for you. They are cancelled in a public registry in your name, so they can’t be resold.
  • You get a record you can check. Gold Standard, for example, sends buyers on its own marketplace a certificate that links to the registry entry where their credits were retiredSource 5.
  • Nobody asks you to wait or hold. There is nothing to sell later, because a retired credit has already been used.

If a pitch includes resale, exit dates or projected profits, it is selling an investment, not climate action.

Fraud inside the carbon market

Not every problem starts with a cold call. US regulators have also acted on fraud in how credits are created and traded.

  • In June 2023 the Commodity Futures Trading Commission (CFTC) asked for tips about carbon market misconduct, including manipulative and wash trading, “ghost” credits, double counting, fraudulent statements about the material terms of credits, and manipulation of tokenised carbon marketsSource 2.
  • In October 2024 it brought what it called its first actions for fraud in the voluntary carbon credit market. It charged a carbon credit project developer, its former chief executive and its former chief operating officer with reporting false and misleading information to at least one carbon credit registry and to third-party reviewers, to obtain credits far beyond what the company was entitled to receiveSource 3.

These cases are about the integrity of the credits themselves, which is why checking the project and methodology matters as well as checking the seller. Our page on do carbon offsets work? looks at the wider evidence on credit quality.

How to protect yourself

  1. Buy to retire, not to invest. Buy credits for your own footprint and have them retired in your name straight away.
  2. Ask for the registry trail. Get the serial numbers and the registry, then look them up yourself; how to verify carbon credits walks through it.
  3. Check the retirement record. On the Verra Registry, a retirement record shows the serial numbers and, if the account holder chooses to show them, the retirement reason and beneficial ownerSource 4. Ask for your name to be shown.
  4. Take your time. A genuine seller won’t rush you.

For what retirement means and why it matters, see carbon credit retirement.

How to report a carbon credit scam

In the UK, contact the FCA on 0800 111 6768 or through its contact form, and report crimes to Report FraudSource 1.

In the US, anyone with information about fraud or manipulation in carbon markets can submit a tip to the CFTC by filing a Form TCR (Tip, Complaint or Referral) onlineSource 2. Whistleblowers may be eligible for awards of 10% to 30% of the monetary sanctions collectedSource 2.

If you have already paid, contact your bank as soon as you can as well. Keep copies of everything: emails, contracts, payment records, the names and phone numbers used, and any certificates or “registry” documents you were sent. Reports are far more useful with that detail, and it helps your bank if it can recover the payment.

Where to go next

Before buying anything, learn how to verify carbon credits in a public registry. When you are ready, our guide to buying carbon credits explains the whole process.