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Indiana Securities Division

Securities Division > Indiana MoneyWise > Personal Finance 101 > Oil and Gas Red Flags Oil and Gas Red Flags

If you are considering an oil and gas investment, look for these “red flag” warnings of fraud:

Sales Pitches Focused on Highly Publicized News.  Scam artists read the headlines, too.  Often, they'll use a highly publicized news item, like volatile gas prices, to lure potential investors and make their “opportunity” sound more legitimate. 

“Can't Miss” Wells.  Every investment carries some degree of risk so you should be skeptical of any oil and gas investment opportunity pitched as completely safe. 

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.  

Unsolicited Materials.  Be especially careful if you receive unsolicited materials about an investment.  Simply ignoring investment-related “junk” faxes, emails, voice-mail messages, and regular mail may be your best strategy. 

And don't let a package full of colorful marketing materials impress you, even if it's sent by certified or overnight mail.  If you're not going to research an opportunity fully, do yourself a favor, and put any unsolicited materials in the recycle bin immediately. 

If someone calls to follow up regarding the materials, tell him or her “thanks, but no thanks”, and hang up. Hanging up is critical, because scam artists often use scripted sale pitches to keep you on the phone.

Limited Opportunities.   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.  Resist the pressure to invest quickly, and take the time you need to investigate before sending money.  

High Rates of Return.  Compare promised yields with current returns on well-known stock indexes. Any investment opportunity that claims you'll get substantially more could be highly risky. And that means you might lose money.

Tips or Secrets.  A promoter may discourage you from talking about the opportunity with someone you trust, like a loved one, attorney or financial professional.  If that happens, stop listening, and leave or hang up.  Then, be sure to contact us by visiting http://www.indianainvestmentwatch.com/or by calling 1-800-223-8791.

If you believe you have been a victim of an Oil and Gas scam, or any other investment scam, please contact the Indiana Secretary of State's Securities Division at 1.800.223.8791.