Filed under: Fraud
So in hard economic times, when money is tight for everyone, where do the scam artists turn? To the helpless masses who have gotten themselves into heaps of debt, of course. A recent series of news stories from the CBC has brought to light this seriously disturbing trend.
In late June, a joint investigation by Canadian and U.S. authorities shut down Mutual Consolidated Savings, a business running a debt-reduction scam. The company, based in Washington state, has managed to bilk thousands of Canadians and Americans out of $22.5 million dollars. Here's how the scam works. Consumers who have amassed mounds of debt on a credit card, and who are consistently making low monthly payments, get a phone call. The scam artist offers a solution. For just $899, the company promises to lower the interest rate on the victim's credit card to as low as 6.9%. That's a huge decrease from the 18%-plus most credit card companies charge. The victim is told that this will save them thousands of dollars, and they'll be able to pay off their debt three to five times faster than at their current interest rate. The scam artist even offers a (fake) money-back guarantee.