For example, these agencies generally have information about a company’s drilling history that could confirm claims of prior success. You may be able to verify information provided in offering materials by contacting the oil and gas regulatory agency in which the wells are allegedly being drilled. Contact state oil and gas regulatory agencies.Savvy investors take the time to do their own independent research. It's not enough to ask a promoter for more information or for references - fraudsters have no incentive to set you straight. Fraudsters rely on the sad truth that many people simply don't bother to investigate before they invest. Ask questions and check out the answers.Here are some steps you can take to avoid being scammed: If that happens, stop listening, and leave or hang up. A promoter may discourage you from talking about the opportunity with someone you trust, like a loved one, attorney or financial professional. Any investment opportunity that claims you'll get substantially more could be highly risky. Compare promised yields with current returns on well-known stock indexes. Resist the pressure to invest quickly, and take the time you need to investigate before sending money. Scam artists often try to give you the impression that the “ opportunity” they are promoting is scarce, hoping you will hand over your money hastily before doing any due diligence. If someone calls to follow up regarding the materials, tell him or her “thanks, but no thanks” and hang up. If you’re not going to research an opportunity fully, do yourself a favor and put any unsolicited materials in the recycle bin immediately. And don’t let a package full of colorful marketing materials impress you, even if it’s sent by certified or overnight mail. Simply ignoring investment-related “junk” faxes, emails, voice mail messages, and regular mail may be your best strategy. Be especially careful if you receive unsolicited materials about an investment. Fraudsters often spend a lot of time trying to convince you that extremely high returns are "guaranteed" or "can't miss." Don't believe it. Every investment carries some degree of risk so you should be skeptical of any oil and gas investment opportunity pitched as completely safe. Often, they’ll use a highly publicized news item, like volatile gas prices, to lure potential investors and make their “opportunity” sound more legitimate. Sales Pitches Focused on Highly Publicized News.If you are considering an oil and gas investment, look for these “red flag” warnings of fraud: In the end, only some of your money may be invested in an actual oil or natural gas well, or none at all. Once they have your money, scam artists pay themselves first, often using funds to pay personal expenses. Many of these schemes start in so-called “ boiler rooms,” where skilled telemarketers use high pressure sales tactics to convince you to hand over your hard-earned money. While some oil and gas investment opportunities are legitimate, many oil and gas ventures are frauds. If you think you’ve found the right oil or gas investment to “strike it rich,” consider this: it may be a scam. - Description of an oil and gas scam victim at the SEC’s first-ever Seniors Summit (July 2006).He ultimately lost over $500,000 to this oil and gas scam investing in wells that always seemed promising at first. Over a three year-period, Henry was recontacted 12 times and invested, essentially, his life savings in 4 different gas wells, each time thinking that he had to invest or lose his original investment. And here are some examples of what was said to him on the phone: “These gas wells are guaranteed to produce $6,800 a month in income ” “Some of the most successful investors in the country are interested in these wells ” “There are only two units left in this project ” “We drilled a well in Texas that had these same early gas readings, and the investors all made millions.”. But the next day, a salesman called him and used high-pressure sales tactics. after his wife’s death, he received an package of materials with all kinds of reports, and it was offering an oil and gas investment. was a successful business man, married for 30 years, raised a family and had a good life.
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