A vast majority of consumers are in some way connected to a group or an association.  Their interests, backgrounds, and other associations will naturally lead citizens to those organizations or affiliations that serve their needs. Knowing this, some scammers target their fellow group members, especially those that are unfamiliar with how financial markets work, by getting them to drop their guard and invest in fake products.

• If Michigan investors have any questions about an investment firm, professional or product, please contact the State Office of Financial and Insurance Regulation toll-free at (877) 999-6442 or online at www.michigan.gov/ofir.
  
• Beware of the use of names or testimonials from other group members. Scam artists frequently pay out high returns to early investors using money from later arrivals. Accordingly, early investors may be wildly enthusiastic about a scheme that may collapse entirely once they've invested. 
  
• Obtain a prospectus or other form of written information that details the risks in the investment and procedures to get your money out. 

The FTC's Tell-tale Signs of a Credit Repair Scam:

• Companies that want you to pay for credit repair services before they provide any services.
  
• Companies that do not tell you your legal rights and what you can do for yourself for free.
  
• Companies that recommend that you not contact a credit reporting company directly.
  
• Companies that suggest that you try to invent a "new" credit identity - and then, a new credit report - by applying for an Employer Identification Number to use instead of your Social Security number.
  
• Companies that advise you to dispute all information in your credit report or take any action that seems illegal, like creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution. 

If consumers are not disciplined enough to create a workable budget they should consider contacting a credit counseling organization.

The scam artist will have the homeowner sign over the deed to the house and promise that they can stay in their house as a renter with the opportunity to buy back their home when their finances improve. Scam artists will then obtain a new mortgage on the house at a higher value than the old loan and keep the difference between the new loan and the old loan.

The scam artist has now stolen the homeowner's equity in the property. They will often walk away from the situation, stop paying the new mortgage and pocket all of the equity. The home will again go into foreclosure and the former homeowner, who is now the renter, will be forced to leave the property and has now permanently lost their house.

Another scam involves a scammer telling the homeowner they are from a company that can deal directly with their mortgage servicer. The scam artist tells the homeowner that if they send them some money, many times over $1,000, they can prevent a foreclosure. But the scam artist never contacts the mortgage servicer and will then try to bilk the homeowner out of more money. In many instances the so called company never even existed.

If Michigan homeowners believe they may have uncovered a foreclosure rescue scam, please contact the State Office of Financial and Insurance Regulation toll-free at (877) 999-6442 or online at www.michigan.gov/ofir

Do not discuss your mortgage loan situation with anyone advertising that they can rescue you from foreclosure.  These are almost always a scam. At best you will only delay the foreclosure and eviction by a few months and at worst, you could lose any equity you have in your property.

If you are an unemployed worker, suddenly in possession of a large severance package, you may be a prime target. Con artists often locate their victims through trade shows; telephone solicitations; television, radio, and print advertisements; and now even the Internet. They tell the prospective purchaser that interest by the public or a specific market niche is very high and that the window of opportunity will soon close. These promoters pressure investors to make a quick decision and hand over their money.

Take the Following Steps Before You Invest in any Business Venture:

• If Michigan investors have any questions about an investment firm, professional or product, please contact the State Office of Financial and Insurance Regulation toll-free at (877) 999-6442 or online at www.michigan.gov/ofir.
  
• Check out the company with the state securities agency or attorney general's office not only in the state where you live, but also in the state where the company is headquartered. These organizations can tell you if the company is registered, if necessary, and if they have any consumer complaints about the company on file.
• Ask current owners or employees about their experiences with the company. Don't accept a list of references selected by the company as a substitute for a complete list of franchise or business opportunity owners.
• Get all promises in writing. Any promises you hear should be written into the contract you sign. 
• Ask for the details of the company's refund policy before you buy. Get that in writing, too. 
• Investigate all earnings claims. Talk to others who have purchased the opportunity to see if their experience verifies the claims. Demand to see the company's basis for its claims in writing. Be skeptical in judging whether the claims are backed up. 
• Listen carefully to sales presentations. Be wary of any opportunity that sounds too easy. The thought of "easy money" may be appealing, but success generally requires hard work. Be wary of buying if company representatives either try to evade your questions -- or ignore them altogether.
• Ask for the disclosure document if you're investing in a franchise. This document, required by law, should provide detailed information to help you compare one business to another. If the company has no disclosure document -- beware! Ask a lawyer, accountant, or business advisor to read any disclosure documents and proposed contracts. Entering into any business opportunity generally requires a substantial investment. 
• Resist high-pressure sales tactics. Buying a business opportunity is a big, expensive decision. Take time to think it over.

Rules to Follow in Steering Clear of Ponzi Schemes:

• If Michigan investors have any questions about an investment firm, professional or product, please contact the State Office of Financial and Insurance Regulation toll-free at (877) 999-6442 or online at www.michigan.gov/ofir.

• Beware of promises of high, guaranteed profits. This is perhaps the easiest way to spot a Ponzi scam. 
  
• Avoid promoters who fail to provide clear and detailed explanations. Don't listen to promoters who tell you that it is impossible to explain their deal in layman's terms.
  
• Ask for detailed information in writing. Any investor is within his rights when insisting on detailed information from a promoter seeking large sums of money.  Ask for information on the company, its officers and financial track record.  If a product is involved in the deal, ask for documentation on its cost, fair market value, and existing and potential markets. 
  
• Verify the promoter's claims.  Remember that seeing is believing. Be skeptical of deals that can't be checked out in person.  When it comes to checking on details of your investment, be particularly leery of claims that all banking transactions and bookkeeping are handled in remote cities or other countries. 
  
• Resist pressure to reinvest without seeing your "profits." Ponzi schemes often are kept going for substantial periods of time by promoters who convince even initial investors to roll-over their "profits" for even greater returns. 
  
• Look for unbusiness-like conduct or disruption of services. Reluctant to have their schemes exposed, few Ponzi operators enlist much, if any, office help, and may even go to the extreme of answering the phone and opening all the mail themselves. 

Unfortunately, there have been many instances of unscrupulous individuals pushing bogus promissory notes. They're being sold as instruments that guarantee above-market, fixed interest rates, while safeguarding their principal. While fraudulent promissory notes appear to give investors the two things they desire most ? higher returns and safety ? they may not be worth the paper they're printed on.
If Michigan investors have any questions about an investment firm, professional or product, please contact the State Office of Financial and Insurance Regulation toll-free at (877) 999-6442 or online at www.michigan.gov/ofir.
Signs of Promissory Note Fraud:

• The promise of above-market returns. Returns that are higher than those of similar investments should raise questions.
• "Risk-free" notes. Your risk with promissory notes is that the issuing company will not be able to make principal and interest payments. Since risk and reward are intrinsically related, it pays to remember that there is no such thing as a low-risk, high-reward investment.
• A start-up's notes that are labeled "prime quality." In the securities industry, prime quality investments require that a company have an established history of operations and earnings. So if the company issuing the so-called "prime" notes is a start-up or new company, steer clear.
• Notes from a stranger. A call or visit from a stranger hawking promissory notes is usually a good sign that the investment is fraudulent. Remember: only an investment professional familiar with your financial situation is in a position to determine if this investment is appropriate for you.

Remember, if something sounds too good to be true, it probably is.

How to Avoid Being Swindled Oil and Gas Investment Fraud:
Potential investors should not to be afraid to ask the hard questions when solicited for oil and gas investment opportunities. Investors wanting to make oil and gas investments should consider oil exploration and producing companies which are well-established and listed on the New York Stock Exchange. You can minimize the risk of being swindled if you resist pressures to make hurried, uninformed investment decisions.

There are several steps you should take before parting with your money.

• If Michigan investors have any questions about an investment firm, professional or product, please contact the State Office of Financial and Insurance Regulation toll-free at (877) 999-6442 or online at www.michigan.gov/ofir.
  
• The Salesperson. If it is a legitimate deal, the salesperson will not be reluctant to answer questions or provide written explanations to questions.  Ask the name of the person offering you the security, where he is calling from and his background, particularly in other oil or gas ventures.  Ask what commission and/or other compensation the salesperson will receive. 
  
• The Company.  Ask the names of the principals of the company or the general partners offering the security, their backgrounds and experience in the oil and gas industry, and how long they have been associated with the company.  Find out the history of the company, its capitalization, assets and retained earnings.  What contingent liabilities does it have from other ventures?  Does it have sufficient funds to cover unexpected costs?  Is the tax treatment of the investments, as claimed by the promoters, supported by the Internal Revenue Service?
  
• The Investment.  Make sure funds raised are kept in a separate escrow account until used and that they won't be commingled with other funds.  Also, be certain the funds will not be used for purposes other than those specified.  Ask how much money is to be raised and the cost per fractional interest.  Ask how much of the money will pay for advertising, salaries, sales commissions and any estimated profit to the company. Ask what type of conveyance document will be provided after any investment is made.
  
• The Lease. Secure a legal description of the property on which the program is to be drilled.  How and when was it acquired?  Is the principal selling the lease to the venture at the acquisition cost, and if not, how much profit is being made?  Ask for a description of surrounding property, including local well completions and a geologist's report on the area.  You will want to know if the lease is already in default and whether there is any overriding royalty or landowner's royalty or other leasehold burden being paid.