The 'can't lose' holiday property development scam that will cost you big

BeachFive years ago, I wangled my way onto a "property inspection visit" to Bulgaria. At that time, I received regular spammed emails inviting me onto all sorts of overseas visits to see holiday homes which, the sender assured me, could be rented out for a fortune and could only soar in value.

I pretended to be interested as a buyer – I kept very quiet about my journalistic status.

Wined and dined for less than £40
The properties available for inspection were located all over the place. Besides Bulgaria, there were trips to Spain, Portugal, Cape Verde Islands, even Mongolia. Most offered a flight plus a few days' hotel and board in the area for around £500 to £1,000. Some – the majority – said they would deduct the cost of the weekend if I bought.

That sounded a very bad idea. It was not much of an attraction to spend £120,000 or more on a property, in order to get a couple of hundred pounds refunded.

But a minority – including the Bulgarian one – made no such demands. Instead for just £39, I (and a partner, should I wish) would fly to Sofia from Gatwick and back, have two nights in an hotel, and be wined and dined. I would not have to spend a penny (or a Bulgarian lev) the whole weekend.

It was much better than staying at home.

Use your imagination!
The development was in a winter sports area and it was December, so there was good snow on the slopes. But the clever idea the UK developers had was to also sell the property as part of a golf resort, offering all round the year usage.

The architect's model with cardboard mountains in the background looked great. Then it was time for the trip to the site.

It was not at its best. There was a mix of snow and mud – good job I'd packed heavy boots. Worse, there was nothing to see except a few stakes in the ground joined by coloured tapes. We had to imagine what the completed building would look like. And we had to work out where the access roads would go.

So we had a snowy/muddy field, which was too far from the ski lifts to attract winter sports fans and too far from the golf course for the summer activity, with nothing in it except marker poles and tapes. This did not stop the salesman taking us to a very big lunch and trying to get us to sign up to apartment purchases starting at £140,000 and moving up to £200,000.

And then there was an even bigger dinner including non-stop drinks and dancing which went on to 4am. It was great.

No building was ever constructed
I don't know if anyone did buy. I obviously didn't. But the salesman only needed one purchase every three weekends to more than pay for all the hospitality.

We were invited to put down deposits of 20% or more. And there were local lawyers present to take our money and ensure we signed the right papers (in Bulgarian).

There were purchases eventually on this site. But there never was a single building constructed. It seems the field is now still a field where locals continue to graze their animals.

Those who paid have lost their money. The development company, which was linked to a couple of guys in the UK, went bust.

But this form of failure was hardly rare. Many other planned developments in Bulgaria and elsewhere hit the same buffers. Someone recently told me that she had paid a €30,000 deposit (about £22,000 at the time), half the asking price, on a small Bulgarian seaside flat. Again, despite the developers having a UK base, she was told the block would not be built because the builders had gone bust. She says she is in contact with many others who have lost similar or larger sums at this resort development. And there is a huge number of other victims who have waved goodbye to big money elsewhere in Bulgaria and in other heavily promoted 'can't lose' holiday developments.

Last week, she was emailed with an offer that seemed good. If she sent a developer €6,000 (£5,000), she could restart her holiday home.

Alas it was too good to be true. It was a 'bait and switch' scam – the bait is that one payment would get her back on track. The switch is that she would have to start all over again with a second-hand property which was probably either unsellable, or the owner had failed to pay for itm or the builder had gone bust after completing it. Whatever the reason, she would end up overpaying for something unattractive.

Sadly, she has now accepted that she was ripped off. She says she would never buy anything again that she cannot see, feel and smell.

Revealed: The 10 most common scams

Revealed: The 10 most common scams

More stories