The Insolvency Service is warning the public to be alert to the unscrupulous practice of land banking as figures indicate that these scams are on the increase.

Since 2007, Company Investigations, which is part of The Insolvency Service has closed down 49 land banking companies in England and Wales that have collectively caused the public to lose over £30 million, while 39 companies have been wound up that have led to investor losses of £13.4million since 2009.

Land banking involves a plot of land - often green or brown belt - being bought by ‘developers’ and then being sub-divided into a number of smaller plots which are then marketed, often under the false pretext that planning permission will be granted for development.

The Insolvency Service reports that it has seen a 33% increase in the number of complaints it has received (2009-2011) against companies involved in these scams and a 100% increase over two years in the number of complaints about land banking scams accepted for investigation. To date, nine directors of land banking companies have been disqualified by The Insolvency Service and it is estimated that total losses from all land banking scams exceed £200million nationwide.

Robert Burns, Head of Investigations at The Insolvency Service, said: "Its clear that land banking scams are designed to target the more vulnerable investor, many of them trusting pensioners who are eager to see a greater return on their savings or pension lump sum than they could ever expect from traditional savings and investments.

"We need to alert people to the warning signs and the fact that if a scheme seems too good to be true, thats usually because it is.

"The public needs to be aware that land sold by these schemes is nearly always sold without planning permission and promises that planning is likely or in place, is a tell-tale warning signal. A check with the Local Authority planning office should provide a quick answer on the prospects of planning permission. Many potential buyers, including those now being targeted from overseas, might not be aware of this. Land Registry also includes some helpful advice on its website."