June 26, 2007

Scam Alert: Beware of oil and gas investment schemes

 - Idaho Statesman

Are you tired of paying hundreds of dollars for gasoline? Wouldn't it be nice to be the one making money while your friends pay those big bucks to fuel their cars?"

These are the opening lines of a letter and e-mail quietly racing through the West. The offer invites ‘only serious' investors to make telephone contact and start themselves on the road to riches. Unfortunately, our victims end up paying big bucks only to learn this investment deal will leave them abandoned and needing help.

The rising cost of gasoline has fueled new efforts to promote gas and oil investment opportunities. Our pain at the pump lends itself to questionable investment deals, overhyped solicitations and a wave of Internet chat-room speculation.

Some of the most common opportunities include oil and gas exploration expeditions, the building or discovery of new oil wells, or foreign-company investments.

If you are subjected to a high-pressure sales pitch in an unsolicited telephone call or letter or are offered a hot tip on the Internet, watch for the following tip-offs to trouble:

• The oil well investment "can't miss."

• There is very little risk involved.

• The promoter has hit oil or gas on every other well previously drilled.

• A lot of oil or gas has been found in an adjacent field.

• A large reputable oil company is already operating near the company's leased property, or is planning to do so.

• A decision must be made immediately to invest to assure the purchase of one of the few interests remaining to be sold.

• The deal is available only to a few lucky and specially chosen investors.

• The salesperson has personally invested in the venture himself.

• A tip from a reputable geologist has given the company a unique opportunity to make its venture a success.

You can reduce your risk of being swindled by being suspicious of any deal that promises a fantastic return at little risk. If you are unsure whom you are dealing with, check the company's reputation with your local Better Business Bureau, the U.S. Postal Inspection Service, or the Idaho Attorney General's Consumer Protection Unit.

Nora J. Carpenter is executive director of the Better Business Bureau, a not-for-profit organization serving Southwest Idaho and Eastern Oregon. For questions or comments about this weekly feature, go to www.askbbb.org or call the BBB at 342-4649 or (800)-218-1001.