"A Sucker Born Every Minute": Avoid
These Debt Consolidation Scams
The web communications revolution has provided
many unprecedented opportunities for commerce – and unfortunately, quite a few
opportunities for swindlers to prey on the gullible. This is just as true for
debt consolidation as for anything else. Here are some debt consolidation scams
to stay away from:
1. “Free Debt Consolidation Services”
Why are these guys doing it for free? How are
they making money? Do be aware, though, that cheap debt consolidation services
are not always a rip-off, although it would be a good idea to take a second
look at anything that sounds too good to be true.
2. Consolidate Your Debts Using Free Government
Grants
Yeah, right. The woods are thick with companies
that offer information about “free government grants”. Haven’t you heard? Uncle
Sam is giving away money like candy (which explains our high taxes!). And you
can use this money any way you like – for example, to consolidate your debts.
It’s true that the government gives loads of grant money, but I have yet to
hear of a Citizen Lifestyle Enhancement Fund. It’s not easy to qualify for
government grants, you have to spend the money for a particular purpose, and
using it to consolidate your bills might just win you a free bonus – a
five-year vacation at the Club Fed.
3. “No Repayment Necessary”
I don’t quite know quite why I included this
one, except for entertainment value – if you can read then you’re probably too
smart to fall for it. Anyway, here goes: Did you know that banking laws
prohibit the charging of interest, and that the Supreme Court has backed this
up with several decisions? You can borrow money, fail to pay it back, and then
retain a smooth attorney to get you out of paying it back – after all, they had
no legal right to lend you the money. Would you like to know how? Well, for the
low, low price of $69.95…
If you fall for this one then I’ve got some
swampland in Florida I’d like to sell you sight unseen. Oh, and by the way,
even if banking law DID prohibit the charging of interest, you’d still have to
pay back the principal.
Most debt consolidation swindles are
see-through because they aim to take advantage of somebody in financial and
emotional distress. As P.T. Barnum said, “There’s a sucker born every minute”.
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