June 13, 2010 (San Diego) -- The San Diego Better Business Bureau (BBB) has issued a consumer warning about potential investment scams by companies supposedly involved in the Gulf of Mexico oil spill cleanup. Some companies touting their role in the cleanup efforts may be legitimate, while others could be nothing more than bogus clean-up operations designed only to clean-out unsuspecting investors, said the BBB.
“The threat to financial investors by scammers could pose as great a risk as the oil spill to the Gulf Coast eco-system,” said Sheryl Bilbrey, San Diego BBB president/CEO.
The BBB says oil spill clean-up stock scams, following the oil rig blast seven weeks ago that led to the nation’s worst oil spill, could arrive via a phone call, fax, text message, e-mail, blog post or even a tweat that contains the following:
-- Claims to have newly developed products or technologies that are super-effective in remediating oil spills or quickly restoring the environment or cleaning oil-drenched pelicans or sea turtles;
-- Announcements of lucrative contracts or expected contracts with BP, formerly British Petroleum, that will aid in the cleanup project or cap the billowing clouds of crude gushing from the ruptured well, all resulting in rapid, exponential revenue sales, profits or future stock growth;
-- Claims that the company is providing technical assistance or expertise to BP or to U.S. governmental agencies, such as the U.S. Coast Guard or Environmental Protection Agency (EPA).
-- High-pressure sales tactics to invest immediately or forever lose the opportunity.
The BBB recommends the following tips to avoid stock investment scams:
-- Investigate before your invest. Never rely solely on information contained in an unsolicited communiqué. Verify with independent sources. Read the fine print in a company’s quarterly and annual reports with the Securities and Exchange Commission (SEC). Take your time, don’t rush.
-- Find out who sent the unsolicited message. Often, those individuals who tout risky stocks are paid to do so by the company being touted.
-- Find out where the stock trades. Sometimes, buy recommendations involve stocks that do not meet the listing requirements on the major stock exchanges. Instead, these stocks appear on the OTC Bulletin Board or in the Pink Sheets, which do not impose minimum qualitative standards and trade infrequently, making it difficult to sell your shares.
-- Be skeptical about guaranteed, quick profits and claims that may be exaggerated or misleading. Scammers can be very skilled at making their pitches appear real, including the use of slick-looking videos and websites. Be extremely wary and suspicious of any pitch that suggests immediate pay-offs, especially if the investment involves a start-up company or a product or service that is still in development.
For more consumer protection information, visit the Better Business Bureau’s website at www.bbb.org, or phone the BBB's free 24 hour Consumer Helpline at (858) 496 2131 or (800) 600 7050 to obtain free information and a list of BBB accredited businesses in a particular type of industry before buying decisions are made. The San Diego BBB, which opened in 1921, is San Diego’s largest county-wide business membership organization. The BBB promotes business ethics through voluntary self regulation, consumer and business education, and provides the largest free service of its kind with free consumer protection advice and free reliability reports on more than 101,000 local companies.