Bad economic times can be boom times for scammers.
"What we have historically seen is that the predators go after people when they're desperate," said Frank Dorman, spokesman for the Federal Trade Commission. "It's when people can't pay their bills and they don't know where to turn."
The agency and other investigative bureaus have put out warnings about money scams often aimed at folks who suddenly find themselves in economic turmoil.
Credit repair
If your once-pristine credit status becomes tarnished because you fall behind on bills, there will be plenty of people who will want to help cleanse your credit report.
Approach with great caution.
Officials at the FTC, which has taken action against about 70 companies that promise credit repair, say they have yet to come across a legitimate business that can quickly eliminate rightful dings on a credit report.
One sure-fire indication of a scam: A so-called credit repair company tries to collect an upfront fee or deposit.
Under the California Credit Services Act, any credit services company has to first put in writing exactly what they will accomplish for you. And it can't collect any money "until it has fully performed the agreed services."
Foreclosure rescue
Little is more frightening in the financial realm than facing the foreclosure of your home.
It can leave you vulnerable to the tactics of scammers who advertise, for example, "We Can Save Your Home. Guaranteed."
Watch out if you're asked to pay an upfront fee -- or your monthly mortgage payment -- to someone who says he or she will negotiate with your lender. That's probably a setup for a rip-off, the FTC says.
All too often, the scammer pockets the money and does nothing.
Another red flag: You're asked to sign documents for a "rescue" loan you didn't ask for. Check any such documents carefully to make sure you're not unwittingly signing over the title to your home.
And be aware of rent-to-buy schemes in which homeowners turn over titles and then pay rent on plans that allow the homes to be eventually repurchased.
In these scams, the new owner might continuously raise the rent until the resident can be evicted and the house sold to someone else. Or the terms of the buyback agreement could be so convoluted that they can't ever be met.
Hidden bankruptcy
Watch out for advertisements that promise a quick solution to debt. They might be offering nothing more than bankruptcy.
