Oil And Other Energy Investment Scams Likely On The Rise
Scam artists have always followed the headlines. With oil prices setting all-time records, history tells us that con artists are already peddling investments in "alternative energy" resources, such as a company that claims it can burn water as fuel or that is building refineries to harness the energy of animal renderings. Even companies that tout their abilities to render more traditional sources of energy such as oil wells or coal burning plants should be studied scrupulously or avoided altogether as suspicious in the current economic climate, particularly if the investment is represented as anything other than highly speculative. If an investment is hyped as "can't miss," or if high or guaranteed returns are promised, the offer is likely a scam to be avoided.
Securities regulators regularly report an increase in such schemes whenever oil prices are high. For example in March 2001, the date of the last major oil price spike, the California Department of Corporations reported that it was looking into 20 new offerings in the alternative energy field. Within two years of that date regulators in seven states -- Washington, Kentucky, Oklahoma, Texas, Wisconsin, Kansas and Ohio, had taken action against promoters of such schemes. The AARP regularly counsels its members to be on the lookout for oil and gas investment scams when gas prices are high.
