Smart Borrower Blog

FTC Fights the Latest Wave of Scammers

Apr 10th, 2009 @ 3:21 PM by Alden Smith

Create a conflict, and the scam wizards come out of the woodwork.   Ever the opportunist, they prey on people in trouble, taking advantage of the fact that the person is distressed and confused.

Now we see that the FTC has uncovered yet another shady business deal.   Mortgage modification and bankruptcy prevention services are popping up all over the country.   They target consumers whose home is endangered, and used deceptive marketing strategies that aligns them with nonprofit or government organizations.

The approach people with their services, and demand an upfront payment for these services.   This can be as much as $1K-$3K.   They brag about a 97% success rate, which should be a red flag for anyone right out of the gate.   For one thing, nonprofits don’t charge an upfront fee.

The FTC says these companies charge upfront fees for their services and use copycat names and look-alike websites to appear to be legitimate.   What they do is take your money and run.

A lot of the big guns on the Hill, including FTC Chairman Jon Leibowitz, have begun a campaign against these unethical scammers.   They know that these people are taking advantage of people in a difficult situation, who are struggling to keep a roof over their heads in their head above water.   Common sense shows you people in these situations aren’t thinking clearly.   And that is when the roaches crawl out of the woodwork.

President Obama is currently pushing for people to refi their homes.   It is seen as a solution to get the economy moving again, and giving people breathing room until the economy begins to straighten out.   Although this is fine and good, give consideration before you do, especially if you have a lot of equity in your home.   At this point in history, people should be very cautious and careful with their money.   This is especially true for boomers and people living on a fixed income.