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Don't Get Fooled by Energy Scams

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Don't Get Fooled by Energy Scams
A Report from Secretary of State Robin Carnahan

Jefferson City, Mo. - infoZine - As the price of oil and natural gas continues to rise, Missouri residents are seeing a greater strain put on their pocket books. Whether you're a farmer who needs fuel for a tractor or a commuter driving to and from work, that strain is being felt by all of us.

The high price of fuel is also creating a need for new energy options, and many far-sighted businessmen and women have begun to put a greater emphasis on opening the way for ethanol, biodiesel and other forms of alternative energy. Unfortunately, this growing interest in alternative energy has also paved the way for scam artists hoping to capitalize off legitimate businesses and trick Missourians into investing their hard-earned money in phony energy companies.

As Missouri's Secretary of State, it's my job to help Missourians protect themselves from investment fraud by cracking down on those companies who try to defraud Missouri investors out of their savings. Recently, the Securities Division in our office has seen an increase in the number of ethanol, biodiesel and other alternative energy ventures. At the same time, we've seen an increase in the number of complaints and tips relating to energy scams. So, while it's clear there are a number of legitimate alternative energy projects, it has also become apparent there are a number of fraudsters who are using the success of these companies and rising fuel costs to dupe Missourians out of their money.

For example, we recently took action against a company whose promoter claimed the company had invented a car that didn't need gasoline to run, but instead could run on water. For many of us, this idea may seem too good to be true, but unfortunately, a few Missourians fell victim to the persuasive scam and handed over their savings to the company. After being tipped off, our office was able to step in and make the company pay the victims back.

The lesson in that example is that before you invest your life savings into alternative energy ventures or other investments, you should do research to make sure the company and its investments are legitimate. Most companies offering investment opportunities are required to be registered with the state, and Missourians should contact our office's Investor Hotline at 1-800-721-7996 to get information about whether a particular company, advisor or investment product is legit.

It's also important to recognize that ? as in the case of the water-powered car ? claims that sound too good to be true usually are. Many scam artists attempt to use high pressure tactics and trick investors by promising unusually high returns or claiming incredible discoveries. Scam artists may use promises of "untapped oil fields," and say things like, "You must act now," and "This is a limited opportunity!" If you're contacted by an individual or business using such strategies or making outrageous-sounding claims, then you should call the Investor Hotline immediately.

Protecting yourself from investment fraud is particularly important for seniors. According to the National Center on Elder Abuse, 75 percent of financial fraud victims are seniors. Scam artists tend to target seniors because they often have amassed large savings through their pensions or retirement. To make matters worse, it's often harder for seniors to recover after falling victim to investment fraud. Younger victims have the rest of their lives to work and recoup what they lost to scam artists, but seniors have to live off the funds they've saved for retirement and often can't return to work to regain what they've lost.

In the Secretary of State's office, we're working to identify and crack down on the scam artists targeting seniors, but we also need your help. It's up to you to educate yourself and do the necessary research before handing over your retirement savings.

But let me be clear, I'm not suggesting that you pull your savings out of your current investments and hide it under the mattress. In fact, I am confident that most of those in the investment business and those offering oil and gas extraction projects and alternative energy offerings are honest and trustworthy. However, it only takes one ill-advised investment or one contact with a scam artist to wind up with a devastating financial hit.

I encourage you to visit the Secretary of State's Web site at www.sos.mo.gov/securities for more information regarding investments and fraud protection or for information regarding a company or representative. And, most importantly, please remember to call the Investor Hotline at 1-800-721-7996 before you invest

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All ambitions are lawful except those which climb upward on the miseries or credulities of mankind.
Joseph Conrad,

Use your own mind on what to buy and sell!!