The Los Angeles Times did an article this week on consumer scams thriving during difficult economic times. I think their observations and comments were right on the money!

If the searches consumers are using to get to my site are any indication, they’re researching scams more than ever. It seems to me that when consumers get desperate, they’re easier to con into believing that an MLM or other business opportunity scam is the answer.

What’s $500 when it may change your entire life? Well…. $500 is a lot, and that money could go toward the mortgage or feeding the kids. And when you figure that 99% of people will lose money in MLMS, you realize the odds are horrible and people are almost guaranteed to lose that $500 investment.

Here’s a rundown on the scams the LA Times says are getting more consumers…

1. Credit repair – There’s really no way to clean up your credit, other than to consistently pay your bills over time. Companies that say they can get the negative information removed from your credit report are lying. If there’s something on your credit report that is incorrect, you can get that removed on your own. If legitimate negative information is reported, the only thing that will heal that is time (and regular bill-paying).

2. Foreclosure rescue – Finding a company that will legitimately save you from foreclosure is difficult. Many of the companies advertising this help really want to help themselves to consumers’ equity in their homes. They either charge money and do nothing, or they enter into some type of arrangement in which the company gets ownership of the house and rents it back to the original owner with some sort of opportunity to buy it back. (Guess how often the original owner really gets their house back?)

3. Hidden bankruptcy – Some companies advertise a solution to your credit problems that is really nothing more than bankruptcy. Don’t fall for it. Bankruptcy isn’t always the right answer, and even if it is, you should be seeing a reputable attorney to do it.

4. Free lunch seminars – Many of these seminars are nothing but sales pitches used to lure you into buying an expensive kit, program, or “solution” to your problems. Be wary of phony guarantees and overpriced educational materials. Refuse to buy on-the-spot, and go  do some homework about these materials before you purchase anything.

5. Home based businesses – Claims of working from home and true financial freedom are typical lines offered by those selling home business scams. Sounds great, doesn’t it? Unfortunately, most of these ideas will end up costing consumers more than they’ll ever get out of them. There are the traditional envelope stuffing scams and “assemble our product at home” scams. But add to that all the multi-level marketing companies like Mary Kay, Avon, Usana, Herbalife, Amway,and the like. These opportunities sound legitimate, but as mentioned above, 99% of participants end up losing money. The response from the MLM industry? Anyone can succeed if they’re willing to work hard, and those who lost money just didn’t try hard enough or stay in long enough. Hogwash. These opportunities are systematically flawed, all but guaranteeing that almost everyone will fail to turn a profit.