Rick Emerson, author of "Zombie Economics," joined us with important information on how to avoid the most frequently-used ploys to trick us out of our hard-earned money.
For more financial information from Rick Emerson, check out his Zombie Economics website.
"Dangers in Disguise"
1) So-called "debt-consolidation services"
Be extremely cautious with any company which offers to consolidate your bills or "negotiate" with creditors to lower your debt. Often, this service is merely a euphemism for bankruptcy: a middleman charges an exorbitant fee to arrange the same bottom-line "solution" that you could have initiated yourself (and at a lower cost). Worse, depending on the specifics of the paperwork, you might not even realize the bankruptcy is in motion until it's been underway for some time. In the end, your credit and financial status may be even more tarnished than before. The "debt consolidation company," meanwhile, has pocketed your money and moved on.
When in doubt, research the company. The Better Business Bureau (www.BBB.org) is always a good place to start.
2) The offering/"awarding" of nonexistent grants
These are typically targeted at those who lack the financing for college or the ability to secure a business loan. The victim is asked to pay a "processing fee" or other such upfront payment. Ultimately, no grant money ever appears . . . because there is no grant. Keep in mind: legitimate grants must be applied for, and an extensive amount of paperwork is required. They are not easily obtained, and anyone who tells you differently is angling for a con.
3) The Tech-Support/Software Activation Scam
Currently one of the world's fastest-growing scams, this scheme typically targets users of Microsoft products. The customer receives a phone call from someone claiming to be with "Microsoft Tech Support". They describe a non-existent glitch with Windows or some other fictitious problem, ultimately directing you to download what seems like official software, but which, in reality, is malware which ultimately hijacks your browser activity or exposes your credit card info.
Another variation on this swindle involves telling you that Microsoft needs a credit card number to "activate" your copy of Windows (or some other application.) The bottom line is this: No reputable software company will ever call you or send you unsolicited communications asking for this info. When in doubt, tell the "tech support" person that you'll call them back and ask for their number...which, of course, they won't give you. You can also doublecheck for actual security updates at Microsoft's website.
4) "Limited-Time Offer/Act Now!"
The oldest trick in the book, this approach pressures you to make a decision before you have the time to think it through. Suddenly, you're in the checkout aisle, clutching a bag of fifteen fluorescent T-shirts, wondering what the hell happened. Only respond to a limited-time offer if the item is something you truly need and would have purchased anyway.
5) "No Payments for One Year"
As always, it's important to read the fine print. With some "no payments for a year" scenarios, you're not just postponing payment, but are likely adding to it. The one-year period is treated as a loan from the business to you, and at the end of the year, payments begin...frequently at a very-high interest rate. The bottom line: You'll spend more -often much more- than if you had paid in full with cash.