Tips for Avoiding an Oil Investment Scam
The United States is one of the largest producers of oil in the world, and Texas is the epicenter of it all. While great for the state and economy, being the biggest oil producer in the country has its downsides. This is especially true when it comes to those trying to take advantage of those investing.
While a person can make a lot of money investing in oil, they can also lose a lot by getting mixed up with scammers. Fortunately, there are steps an investor can take to avoid scams and ensure they make wise choices if they do decide to invest.
There are several warning signs to watch out for. Investors should be wary of anyone who guarantees results, as no one can guarantee the success of any investment. In addition, promises of once-in-a-lifetime opportunities should also send a red flag to investors that the opportunity may not be entirely legitimate.
It is also important to remember people making pitches to investors often have inside information they can offer. So, if anyone is using information that is prominent in the news as their main sales pitch, they are likely some type of scammer.
Investors often seek the advice of an investment advisor or investment banker before investing in oil, as they should. However, if an “expert” appears on a doorstep or cold calls potential investors pushing for an investment, an individual should simply thank them and speak to their own investment professional. Solicitors usually do not seek out investors, so this is a big sign that they may not be entirely honest.
Of course, these things are not true for all traders, bankers, advisors, and other professionals. At times there are wells that receive wide coverage in the media. In light of this, there are some additional ways a potential investor can find out if an opportunity is genuine.
The first thing any potential investor should do is research. Ask for the salesperson’s name and that of their company so you can search for them online, or speak to an investment advisor about the offer. The Texas State Securities Board can also provide information on a company, or inform the investor there is no information – indicating it may be part of a scam.
It is important to not just take anyone’s word when it comes to investing; do not be afraid to ask a lot of questions. A legitimate salesperson will answer any questions an investor may have, while a scammer may shy away from questions or distract from them with filler.
The promise of large returns can affect the judgment of anyone who wants to be a part of the oil industry, even just by investing. However, like any time a person asks for money, it is important to do the proper research. With so many opportunities in Texas, it is far too easy for people to take advantage and try to scam others out of money.