LUFKIN, TX (KTRE) - Texans should educate themselves about their financial opportunities and make sure they are dealing with reputable companies and sales agents, the Texas Attorney General's office said in a press release today.
The office warned of red flags of financial scams:
An agent with guaranteed results. No legitimate investment adviser or seller will guarantee positive results. Though they can offer past performance data, honest advisors should freely admit that the past is not a predictor of the future. There is always risk. As a result, it is always possible that an investment will fail and money will be lost.
Agents in a hurry to close the deal. Tell-tale signs of a scam are high-pressure sales and demands for secrecy. Real investment opportunities rarely require instant decision-making. Serious investors almost always take time to research their decisions.
Offers from unsolicited telephone call, postcard or e-mail. Texans should be skeptical of unsolicited offers for services from unknown companies. Though some legitimate brokerage firms will contact potential investors, an online search can help distinguish between small-time operators and established firms.
Phony companies that promise huge crude oil profits. In Texas, especially when the price of oil is high, investors complain about bogus oil and gas investment opportunities. The State Securities Board oversees oil and gas investments, so Texans who are considering an oil and gas investment should contact the board and request information about the producer. Also, the Texas Railroad Commission can tell investors whether the seller is registered as a producer in Texas and the commission can also provide information about the leases the producer has operated in the past.
Texans should also be particularly cautious about investment offers that involve friends of friends, or even friends of family members - rather than professional, registered securities dealers.
Investors should consider consulting with an independent financial advisor to learn about the types of investments and insurance that fit their goals and risk tolerance. It is critical that Texans learn as much as possible about their financial investments, including past performance.