Simon Read: The landbanker's £32m fraud is a sharp lesson to all of us

Landbanking reared its ugly head again this week after the City watchdog won a £32m High Court judgment against three firms. Landbanking – to remind you – is the process where firms offer tempting deals in which you can snap up undeveloped land in the expectation that it is going to be sold on to a major supermarket or similar.

The deal, of course, will net you a handsome profit, or so the smooth-talking sales force will have you believe. The truth is normally far from that. The plots of land sold are often worthless with multiple building restrictions on them because they are in areas of natural beauty. That's if they even exist in the first place.

Landbankers are notoriously unscrupulous in sucking unwary people into their dodgy schemes. This week's landbankers who lost in the High Court are James Kenneth Maynard (who operated under the business names Regional Land and Countrywide) and Wasim Minhas (a director of another firm call Plateau).

They sold land in such places as Crowborough in East Sussex, Brentwood in Essex, Aylesbury in Buckinghamshire and Okehampton in Devon. In other words, they chose ordinary sounding places.

In the High Court, Judge Pelling banned Mr Maynard for life from selling land for business purposes in the UK and ordered him and Countrywide to pay £31,896,194 to the Financial Services Authority (FSA).

Meanwhile, Plateau – which is now in liquidation – was instructed to pay £918,975. Minhas, was ordered to pay £75,000 to the FSA. Additionally, a bankruptcy order was made against Maynard, who is now believed to have left the UK and be living in Northern Cyprus.

The FSA has upped its activities against landbanking crooks. Tracey McDermott, the acting director of enforcement and financial crime at the FSA, said: "This decision sends a message to other landbanks that we will not sit by and let them con investors out of their money.

"Indeed we have also started court actions against others that we believe have been involved in Maynard's scheme," she added.

But such high-profile actions won't stop new landbankers appearing and appealing to the greed in all of us to make a quick buck, especially at the expense of big business, as landbankers promise.

There are some simple things to do to avoid being caught by the scam. For starters if you're thinking of investing in land, have it independently valued to check its worth.

In addition, if you are offered land as an investment with the promise of fabulous returns, check the firm is authorised by the FSA by calling its consumer helpline on 0845 606 1234.

After my warning last week about complicated financial products such as structured products, exchange traded funds, absolute return funds and traded life insurance policies, a concerned reader got in touch.

He sold out his shares last year and has been re-investing into an exchange traded fund (ETF). In essence his question was, "Have a made a ghastly mistake?"

The simple answer is probably not, although that may depend on which ETF he's invested in.

A year ago I wrote: "Exchange traded funds are sold as a low-cost way to invest in a wide range of different investments. They are similar to tracker funds in that they are passive investments. But problems are beginning to be voiced about just what the underlying investments are, and are they safe."

A year on and ETFs have grown in popularity. It's that extra popularity that has given rise to further questions about them. The more that people stick their savings into an ETF, the more likelihood there is that there are some folk who don't really know why they have done so.

Further, they may have no real idea what their money is invested in. And that is the problem with ETFs – and other complicated investment wrappers. On the face of it they can look like attractive propositions. But unless you take a close look under the hood and understand what you see, how do you know what's happening to your money?

I'm sure that there are plenty of you – the reader who contacted me this week among them – who are confident enough as investors to make reasoned decisions about where to put your cash. But to the others I simply say, if you don't understand it, don't invest in it.

How many of you are using an iPad these days? They're an easy way of going online unless – it seems – you're a customer of NatWest's Black account.

It's a premium account charging £24 a month for a range of special services. But a reader tells me it's impossible to access the services using an iPad. That doesn't sound like a premium service!

s.read@independent.co.uk