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Fraud cases grow as economy worsens

Desperate times call for desperate measures. While the market is flooded with companies that promise to wipe your debt away and rebuild your credit, this opens the door for predatory companies that are just looking to score a quick buck.

The Federal Trade Commission recognizes these types of operations as "last-dollar frauds," which specifically target those who are strapped financially. These companies front as anything from debt relief services to opportunities for people to make money while working from home. These types of operations become far more prevalent and effective when the economy is slow.

Some of these organizations imply they will help guide people away from bankruptcy when, in reality, it may be more effective to file for bankruptcy in order to reorganize debt and start rebuilding credit.

The FTC said operations like the following are some commonly used tactics by companies to exploit people who are in rough financial shape:

  • Credit card and line-of-credit frauds
  • Bogus investment seminars
  • Government grant fraud
  • Precious metal schemes
  • Work-from-home schemes

The FTC has begun going after these companies that claim to offer debt relief services to consumers throughout the country. Recently, the agency was able to shut down a number of companies that did not deliver on providing debt relief or get clients back in solid standing with creditors. These companies claimed they could help get people out of debt within 12-36 months and eliminate late fees and penalties.

When it concerns your financial life, it may be more worthwhile to seek experienced legal advice.

Source: The Washington Post, "Down to your last dollar? Don't let con artists take it from you," Michelle Singletary, Oct. 15, 2011.

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