Smart SpendingSmart Spending

5 predatory money pitches to watch out for

The bottom-feeders come out in force whenever the economy is bad, pretending to offer you or others assistance.

By MSN Money Partner Jul 18, 2011 2:27PM

This post comes from Philip Moeller at partner site U.S. News & World Report.


The stubborn continuation of tough economic times has made it likely that you'll be exposed to bottom-feeding merchants aiming take advantage of you with offers of "help."


They live in late-night TV ads, Internet promotions, and elsewhere. All too often, their gain comes at your expense, and they are particularly aggressive in exploiting seniors.


Be vigilant and careful about responding to offers. Do not give out personal information to vendors you do not know or trust. Make sure your computer is protected so that you don't inadvertently provide personal information you'll later regret. Post continues after video.

Don't be silent if you've been targeted by a scam merchant. Get in touch with your local or state consumer protection agency. Find out if your local Better Business Bureau knows anything about the company or the offer that's been pitched to you. Share your concerns with trusted friends on social networks, so the word gets out. Turning on the lights freezes cockroaches, and shedding light on bad business practices has the same effect.


Here are five services you can expect to see pitched with increasing frequency. There are legitimate providers of all of these services, to be sure, but these areas are also where commercial bottom-feeders live and thrive:

  • Credit card deals. This is not the time to take on more credit, and you'd think banks and other credit card issuers would be learning their lessons from the recession and new consumer protection rules on credit card issuers. But the offers keep coming. (However, you can find a better credit card on your own.)
  • Heartstring "charities." Never give money based only on a phone call. Never give out your credit card number to a stranger. Legitimate charities will seek a pledge and are willing to follow up with a mailed donation form. The best charities spend only a small amount of your donation on their fundraising operations; the worst spend nearly all your money on their salaries. Charity Navigator can help you separate the good apples from the rotten ones.
  • Home equity loans. Like credit card offers, these deals often amount to layering further debts on people who can't afford to pay back the debts they already have. The equity you have in your home should usually be held in reserve and is the last asset to be tapped. The best gift to loved ones is not to be in financial distress.
  • Debt consolidation. Many of these companies charge you for a service that is often available for free from a community group or other local nonprofit agency. If your debts are with one or two creditors, try to work out terms with them directly before turning to a consolidation service. (Do you have too much debt?)
  • Tax forgiveness. Be wary of companies that offer to help you settle your tax obligations for 10 cents on the dollar or some other too-good-to-be-true outcome. As with debt consolidation, there are free services that provide tax help, including accountants' groups that provide free help in preparing tax returns.

Check out the BBB's Scam Source for a list of recent dubious activities and problems around the country.


More on U.S. News & World Report and MSN Money:

Aug 4, 2011 12:44PM
but the media sleeps with these whores because they pay for advertising...they should have laws in place for this.
Aug 4, 2011 10:49AM

As the article states, the bottom feeder sharks come out in force when economic times are tough.


One of the worst of these that I have seen are the  "Free Credit Report" offers that are splashed on the TV and the Internet. If you do not read the fine print (about cancelling their service after getting your "free" credit report), you will be stuck with paying $ 40.00 a month in fees to "monitor" your credit. If you want to check your credit report for free, you can always go to and check out your credit really for free once a year (allowing you to do this once a year is a Federal Law). Otherwise go to each of the credii monitoring agencies (Equifax, Transunion,  Experian) and ask for a one time report from each agency (usually $ 10.00 per agancy per report). It is a lot cheaper in the long run comparing to taking advantage of these "free credit report" offers.


That is my advice.....

Aug 4, 2011 9:21AM

Simple common sense advice.  Unfortunately too many people lack common sense.


Just read complaint boards - for example Millions of people were scammed by the ACAI free trial scam.  Not only was IT NOT the miracle diet pill nor was it endorsed by OPRAH or Rachel Ray -as the BOGUS advertisements claimed, 

Both Oprah and Rachel had disclaimers on their websites that they did not endorse the product.  But the ad said they did - so without bothering to CHECK themselves consumers bought the LIE!


ALL of them agreed to the terms and conditions of the free trial offer - but NEVER BOTHERED to read them!   So when they had more charges against their credit or debt cards that were clearly stated in the Terms and conditions- they all cried SCAM - and most will never acknowledge that there was anything they could have done to protect themselves from the scam.  


 Also in T&C - it stated the trial period started the day you placed the order - not when it was received!  So by the time they received the product - the trial period was already over!


Always check out any NEW vendor - Read the Terms and Conditions and PRIVACY Policies before doing business with them!

Aug 4, 2011 1:18PM
Don't forget about the "prey on your paranoia, especially if you're over 75" identity protection companies.  My 83 year old aunt got a letter the other day and she thought her identity had been stolen.  She was perfectly willing to send this company however much money they wanted.  It was an advertisement, but in her old age and moderate senility, she thought her identity had been stolen.  Greed is taking over, the rich prey on the poor, elderly or unfortunate and then walk the streets, heads held high, full of self pride because of their monetary worth.  You may be rich, monetarily, but morally, you are very very poor.
Aug 4, 2011 1:57PM
And as irony would have it there is an advertisement on this page from One of the worst scams today.
Aug 4, 2011 11:29AM
The old saw is always true, no matter how bad (or how good) the economy gets, "If it sounds too good to be true, it's probably false."

Since things are likely to get a good deal worse before they get any better, we'll likely to see more of these predators promising desperate people something for nothing.  We can either be hapless, helpless victims or we can educate ourselves.  As another saying goes, "Trust in God, but lock your car."  Meaning things will get better eventually, but in the meantime learn to separate the "Sharpies" from people who can really help you instead of having a scam with your name on it.

I wonder how many of the 'EXTENDED WARRANTY' rackets (typically out of St.Louis) are a TOTAL scam. Most pretend call incessantly or sent OFFICIAL-looking mail, pretending to represent manufacturers but do so fraudulently.

One of the biggest, flashiest companies was just recently taken own, the CEO sent to prison and millions in funds were seized.

But not even 'legit' extended warranties like the one I and some other parties purchased from CHRYSLER on our Dodge products were to be recommended. On vehicles that were destroyed or stolen >>>>before the factory warranty expired<<<<, Chrysler was exceedingly stingy in reimbursing. In most cases they hold on to the money and frustrate the owners or have the nerve to PRO-RATE to a fraction only after threatening them with legal actions.

I suggest to STICK WITH THE BEST STANDARD WARRANTY and most reliable models. If some sleaze-ball in St.Louis can pay commissions and live the high-life on gullible customers, you are better off to SELF-INSURE!

Aug 4, 2011 5:54PM
Add "Federal Grant Assistance" to the list of scams. Sold as training courses for filing for grants, from education to home improvement.
Aug 4, 2011 7:29PM
the scams that are plaguing me are overseas inheritance. I'm even getting stuff that appears to be from the FBI. Beware!
Aug 4, 2011 6:04PM
The  most predatory pitchman in the world is Barack Obama with his expensive, wasteful "stimulus plans".
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.