The oil industry has long been viewed as a lucrative business for investors. For this reason, billions of investor dollars are circulated through the market every year in hopes of gaining big profits and fast returns. Unfortunately, the buzz around the industry often attracts scammers who are looking to make their cut, usually by targeting elderly or otherwise inexperienced investors.
Scam Warnings To Look Out For
Before making an oil investment, it is important to be aware of potential scams that you could fall victim to. Below are some of the most common tactics that oil scammers use to lure in their targets.
Pressure To Invest
The largest indicator that an oil pitch is a scam is any kind of pressure to invest coming from the salesperson. This can include making you feel like you will miss out on the opportunity completely if you don’t invest right away, or telling you that you must pay more money to keep your original investment in good standing.
There are plenty of horror stories about inexperienced investors continuing to pour their money into oil projects that don’t exist, all because the salesperson made them believe they would lose everything if they didn’t keep going. After several rounds of collecting investments, the fake oil company would disappear with entire life savings.
A salesperson pressuring you to keep your new investment venture a secret from those around you should immediately go off as a red flag. Whether you speak to your family members or consult with a financial advisor, you should never feel wary about doing your due diligence before any kind of investment.
Promises Of Unrealistic Returns
Another big sign that you are being scammed within the oil market is the promise of unrealistic returns. This can include returns that are available immediately, along with profit margins that are just way too high.
If you are being pitched an investment opportunity that has a guaranteed return, you should run the other way. Oil investments do provide substantial returns, but they also come with a great degree of risk. Therefore, if an idea sounds too good to be true, it most likely is.
How To Avoid Falling Victim To Oil Scams
While it is true that oil scammers are everywhere, you don’t have to be another one of their victims. Take the tips down below into consideration before you decide to invest in any oil project.
Check The Facts
Most scammers in the oil industry prey on inexperienced investors, so they usually won’t pay much attention to the actual information they are giving you. Instead of focusing on crafting a solid pitch, they will use pressure tactics to get you to release your funds. That being said, you can usually fact check what they are telling you with some online research and catch them in a lie.
Research The Company
Before you give anyone your money, it is vital that you research the company and the salesperson. While the corporation might really exist, the person you spoke to could be posing as a representative. Similarly, the company could be in the hole financially or have a terrible track record with past investments.
Either way, you will need to conduct thorough research before handing over a check. The last thing you want to do is fund an oil company that is failing or fraudulent.
Remove Yourself From The Situation
Finally, to avoid oil investment scams, you have to stay firm at all times. It might sound easy to walk away from something that is clearly a scam, but salespeople have a way with words and will always try to pull you back in.
If you notice any of the red flags mentioned previously within any pitch or proposal, you will need to immediately hang up the phone or walk away. Oil scams are alive and well in the fossil fuel industry, but that doesn’t mean that you have to suffer the consequences. If you do your research and remain aware of potential fraud, you can still find success within the oil market as a new investor.