Confusing sign reversals often are observed in coincident-loop and central-loop transient EM measurements, We carried out a 3-D model study which shows conclusively that surficial, conductive patches that are only slightly polarizable can cause negative transients for measurements taken inside a loop. Fortunately this IP effect is negligible if the receiver loop is moved a short distance away from the transmitter loop; hence, separated-loop profiles are not affected by the problem. It appears that IP is the cause of the “loop effect.,” wherein in-loop soundings are depressed at late times, resulang in erroneous 1D interpretations.