Not only do people get desperate.  Companies do, too.

Some offer to reduce your credit card debt for a fee.

Some prey on people whose homes are being foreclosed.  For a fee, this person or business, will make that crisis disappear.  But, usually, the only thing that disappears is your money.  In one case in San Antonio, Texas, a couple lost the home they’d raised their family in after paying an unscrupulous business owner more than they owed the mortgage company.  This, after the business owner had already gotten and agreed to a “Cease and Desist Order” from a court over just this kind of predatory behavior.

These are scams pure and simple.

Perhaps it’s too harsh to call all of these enticing propositions scams.  But when you analyze some of the things companies, even very large, respectable companies, are asking you to do, they certainly could be classified as much better deals for them than for you.

Last week my mortgage company asked me if I’d like to pay 2% less interest and several hundred dollars less a month in my mortgage payment, for no fee from them.  Naturally, I said “Sure!”  But when I received the paperwork yesterday, it turned out there were over $10,000 of additional fees, added into the mortgage payment.  Yes, over the life of the loan I’d be paying less interest, but it would take me 40 payments, or 3 years and 3 months to get back to where I am today.  Was that a good deal?  For the mortgage company, yes.

Seth Godin in Too good to be true (the overnight millionaire scam) writes about the scams that crop up in tough times and the imperative to avoid being suckered in by them:

“Times are tough, and many say they are going to be tougher. That makes some people more focused, it turns others desperate.

You may be tempted at some point to try to make a million dollars. To do it without a lot of effort or skill or risk. Using a system, some shortcut perhaps, or mortgaging something you already own.

There are countless infomercials and programs and systems that promise to help you do this. There are financial instruments and investments and documents you can sign that promise similar relief from financial stress.

Resist.

There are four ways to make a million dollars. Luck. Patient effort. Skill. Risk.

(Five if you count inheritance, and six if you count starting with two million dollars).

Conspicuously missing from this list are effortless 1-2-3 systems that involve buying an expensive book or series of tapes. Also missing are complicated tax shelters or other ‘proven’ systems. The harder someone tries to sell you this solution, the more certain you should be that it is a scam. If no skill or effort is required, then why doesn’t the promoter just hire a bunch of people at minimum wage and keep the profits?

There are literally a million ways to make a good living online, ten million ways to start and thrive with your own business offline. But all of these require effort, and none of them are likely to make you a million dollars.

Short version of my opinion: If someone offers to sell you the secret system, don’t buy it. If you need to invest in a system before you use it, walk away. If you are promised big returns with no risk and little effort, you know the person is lying to you. Every time.

Has anyone tried to scam you?  Write and share your experience.  It will help all of us to have a common pool of scams to avoid.

Related articles by Zemanta

• iReporters offer other ways to spend $700B
• The next bailout: Your adult children?