5 Predatory Money Pitches to Watch Out For

When money is tight, make sure you don’t fall for deals that are literally too good to be true.

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The stubborn continuation of tough economic times has made it likely that you'll be exposed to bottom-feeding merchants aiming take advantage of you with offers of "help." They live in late-night TV ads, Internet promotions, and elsewhere. All too often, their gain comes at your expense, and they are particularly aggressive in exploiting seniors.

[See 10 Smart Ways to Improve Your Budget.]

Be vigilant and careful about responding to offers. Do not give out personal information to vendors you do not know or trust. Make sure your computer is protected so that you don't inadvertently provide personal information you'll later regret.

Don't be silent if you've been targeted by a scam merchant. Get in touch with your local or state consumer protection agency. Find out if your local Better Business Bureau (BBB) knows anything about the company or the offer that's been pitched to you. Share your concerns with trusted friends on social networks, so the word gets out. Turning on the lights freezes cockroaches, and shedding light on bad business practices has the same effect.

Here are five services you can expect to see pitched with increasing frequency. There are legitimate providers of all of these services, to be sure, but these areas are also where commercial bottom feeders live and thrive:

Credit card deals. This is not the time to take on more credit, and you'd think banks and other credit card issuers would be learning their lessons from the recession and new consumer protection rules on credit card issuers. But the offers keep coming.

[See 10 Steps to Fine-Tune Your Retirement Plan.]

Heartstring "charities." Never give money based only on a phone call. Never give out your credit card number to a stranger. Legitimate charities will seek a pledge and are willing to follow up with a mailed donation form. The best charities spend only a small amount of your donation on their fundraising operations; the worst spend nearly all your money on their salaries. Charity Navigator can help you separate the good apples from the rotten ones.

Home equity loans. Like credit card offers, these deals often amount to layering further debts on people who can't afford to pay back the debts they already have. The equity you have in your home should usually be held in reserve and is the last asset to be tapped. The best gift to loved ones is not to be in financial distress.

[See the 10 Fastest-Growing Retirement Spots.]

Debt consolidation. Many of these companies charge you for a service that is often available for free from a community group or other local nonprofit agency. If your debts are with one or two creditors, try to work out terms with them directly before turning to a consolidation service.

Tax forgiveness. Be wary of companies that offer to help you settle your tax obligations for 10 cents on the dollar or some other too-good-to-be-true outcome. As with debt consolidation, there are free services that provide tax help, including accountants' groups that provide free help in preparing tax returns.

Check out the BBB's Scam Source for a list of recent dubious activities and problems around the country.

Twitter: @PhilMoeller