Throughout history there has always been people who were rip off artists. These not so nice people felt it was their duty to separate your money from your pocket. They would devise schemes, plans, tricks, ruses and blatant thefts to do exactly that. In more modern times, some of these sneaky people organized themselves. They became institutions. In our capitalist society, many of these ‘institutions’ are legal.

In the simplest form these are companies that make money off misfortune or poor judgment. They describe themselves as being part of the ‘financial services industry’. Whenever that names is used, be careful, be very careful. Like the proverbial snake in the grass, they will offer inducements, promises and prey on your dreams. They will understate the dangers and overstate the value. These financial services are looking to make money on your money, which on face value is not terrible. What is bad, is these ‘institutions’ pla is to keep you in hock and bleed you. From the Frugal Yankee point of view, they are deserving of extreme caution and out right avoidance.

One of the earliest financial services entity was the loan shark. A much reviled figure, the loan shark would prey on the lower strata of society lending money at usurious rates and then collecting overdue balances with threats. Violence populates their culture. Another financial services partner was and is, the pawn shop. With its time honored symbol of balls hanging in the balance, the pawn shop would take valuable assets as collateral for short term liquidity. Both of these ‘services’ made money by using other people’s money. It may be good business for them, but for the person availing themselves of these services, it is a desperate action and is the definition of anti-thrift.

Yet neither of these examples come close to the emergence of anti-thrift institutions comprising the modern financial services industry. Today slick marketing, euphemistic ‘products’ and spokesperson shills lure people into their sphere. Once there, they work assiduously to capture a market segment and hold that segment as long as possible. Most Americans are unaware of this proliferation or if they do notice them, they assume it is normal. It isn’t.

In 1978 the Supreme Court ruled companies could avail themselves interest rates from other states. With that in place, state usury laws were bypassed. This opened the doors to the growth of the ‘financial services industry.’ A few of these anti-thrift institutions are pay day lenders, rent to own and sub-prime credit card companies. The growth curves for these institutions looks like a hockey stick. For example pay day lenders, has gone form a $810 million a year industry to a nearly $30 billion in 2009. That’s darn good growth on the backs of mostly poor, elderly or disabled people.

In California, these ‘stores’ now out number McDonald’s. And they don’t just prey on people living from pay check to pay check. Their ideal demographic, as already stated, is veterans, people on disability and elderly on pensions. These folks can have their checks deposited directly into the companies accounts, again thanks to a change in federal law. They lure one in and then they hold onto them. They are avaricious with little of no conscious.

Most Frugal Yankees know that rent-to-own is a fool’s way to decorate an apartment. The final cost of a piece of furniture procured that way is sometimes five times if purchased through a regular way. The Frugal Yankee recommends never to use rent-to-own. If a family needs furniture consider yard sales or second hand stores where a sharp eye can find some excellent deals. Rent-to-own stores are not thrifty. They are anti-thrift institutions using slick marketing to siphon money out of wallets and into their bank accounts. An HD TV set can cost as little as $300 in a store, but buying one from a rent-to-own store, it can cost five time as much, maybe more.

The last two anti-thrift institutions of note are credit card companies and state lotteries. By now, we understand the predatory nature of credit card companies and how they have manipulated the public and the laws regulating them. Like other anti-thrift institutions, credit card companies want you to be in debt to them so they have a steady income stream. Then they get nasty when things get tough. Remind you of any other anti-thrift institution? How about the first anti-thrift institution discussed? Loan sharks.

Finally, there are state lotteries. Studies more than suggest the people who use this state sponsored form of gambling are in poorer neighborhoods and may have less education. The more well to do neighborhood spend as much as 5 times less than poorer neighborhoods. The state is sanctioning a regressive tax against the less-to-do. Rather than sponsoring thrift and industry, the state sponsors an illusion, that gambling is the way to make the ‘big score’. Sadly, many states spend more money advertising their lotteries than any other state function like tourism or economic development.

In the past 30 years, the growth of anti-thrift institutions has undermined the traditional American values of thrift and industry. Perhaps in this post-recessionary period, the new frugality grown from financial adversity will limit the impact of these predators. More importantly, perhaps the new frugality will steel more and more Americans from the blandishments of slick marketers bent on taking as much money from them as possible. Maybe these rip-off artists will wither on the vine