AUGUSTA — Securities administrator Christine Bruenn, the state’s top securities official, is warning Mainers about investing in promissory notes.

The products, often sold by insurance agents, promise high interest rates.

“Beware, promissory notes are very risky and often fraudulent,” said Bruenn.

Securities officials in over 35 states, including Maine, have reported complaints or brought enforcement actions involving promissory notes. The North American Securities Administrators Association, the securities regulators association made up of all states and Canadian provinces, included promissory notes on its recent list of “Top Ten Investment Scams.”

“Even with recent increases, interest rates are lower than they’ve been in a generation,” said Bruenn. “While that’s been great for the economy, it’s been hard on people dependent on interest income — and struggling people make tempting targets for crooks.”

Promissory notes are often sold by life insurance agents who are lured by high commissions and may know nothing about the promoters of the investment, or the investment itself, beyond what they’ve been told. The notes, also called “commercial notes” or “commercial paper,” typically have a maturity of nine months or less, and an annual interest rate of 8-12 percent, far more than an investor could get on a bank CD or other fixed investment.

Agents pressure clients to “cash in” their life insurance, CDs or other investments, and “roll” the funds into these notes.

The companies selling these investments, Bruenn warns, are likely to be highly speculative startup operations or entirely bogus enterprises that simply abscond with investors’ money or use a Ponzi scheme, paying high returns to the initial investors with money from new investors.

Investors in Maine have lost millions of dollars to promissory note schemes over the last few years, and the number of such schemes is on the increase. Investors in notes of Catherine Petit, Legend Sports, First Lenders Indemnity Corporation and Freeman & Company know only too well the pitfalls of these investments.

Some tips to protect yourself and your money:

Before investing, check with the Maine Securities Division to find out whether the notes are properly registered and the seller is properly licensed. Also find out whether the seller has a disciplinary history. The Division’s toll-free number is (877) 624-8551.

Be suspicious if the notes have an above-market interest rate and a maturity of less than a year. With 30-year Treasury bonds yielding about 4 percent and the national average for a one-year, FDIC-insured bank CD just below 5 percent, you should be very skeptical when someone offers you a nine-month note from an obscure company promising 12 percent.

Beware of claims that the investment is not a security and therefore does not need to be registered with the Maine Securities Division, or that the investment is “no-risk” or “guaranteed.”

Beware of suggestions that you invest on the basis of trust, attempts to discourage you from discussing the investment with a third person, insistence on an immediate decision, and other high-pressure sales tactics.

The State of Maine Securities Division is part of the Department of Professional and Financial Regulation, whose mission is to encourage sound, ethical business practices through impartial regulation of insurers, financial institutions, creditors, investment providers and numerous professions and occupations.