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.
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."
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.
Watch out for advertisements that promise a quick solution to debt. They might be offering nothing more than bankruptcy.
A personal bankruptcy is a legal way to get a breather from debt, but there's a huge downside -- it stays on a credit report for up to 10 years, hindering the chance to get a loan, rent an apartment or even get a good job.
Warning signs, according to the Federal Trade Commission, include ads that say:
"Consolidate your bills into one monthly payment without borrowing" or "Stop credit harassment, foreclosures, repossessions."
The agency suggests that before considering bankruptcy, contact creditors to see if modified payment plans can be worked out.
Free lunch seminars
For thousands of consumers, these so-called seminars turned out to be the most expensive lunches ever.
The seminars, usually held at restaurants or hotel ballrooms, are most often advertised as "educational" or "workshop" events. But a study released last year by the Securities and Exchange Commission found that they're little more than sales presentations.
Warning signs: big promises, such as "Immediately add $100,000 to your net worth," and any investments said to be "guaranteed."
The SEC report said that about half the seminars it attended featured misleading claims, and 13% appeared to be engaging in outright fraud.
It sounds great in the ads -- working at home, choosing your own hours, being your own boss. Examples of these home-based businesses: medical bill processing, craft work, e-commerce sites and the old standby, envelope stuffing.
The FTC warns that all too often, such offers are costly dead ends.
Medical billing pitches say that doctors are in desperate need of subcontractors who can take care of their accounts. Promoters might even say they'll help you find clients.
But after you pay your fee -- which could be as much as $8,000 for "training" and "support" -- you're most likely left on your own, the agency said.
"Few consumers," the agency said in a warning statement, "are able to find clients, start a business and generate revenues."
Assembly or craft work might require a large investment by the consumer in equipment and raw materials. But the promoter reassures that finished work, if "up to standard," will be bought by them.
"No work is ever 'up to standard,' leaving workers with relatively expensive equipment and supplies, and no income," the agency said.
In the e-commerce scheme, consumers are told it's easy to start their own retail business on the Web or simply earn commissions by hosting referral sites.
But there is tremendous competition online, and it's tough for an independent site to get noticed. Too often, the setup fees go down the drain, and to make matters worse, the consumer is pressured into buying worthless "promotional" services that also go to waste.
Envelope stuffing is an old scam. Consumers answering ads are told they can make a good income in the business.
It doesn't work out that way, because the low pay per stuffed envelope requires more work than is humanly possible to make a decent wage.
And in one of the latest versions of the scam, the consumer, after paying the recruiter for information on the envelope-stuffing business, is simply told to place the same types of recruitment ads in local publications, thus perpetuating the scheme.
It makes you wonder if any envelopes, over the years, ever got stuffed.