Twenty-five years after James Randi exposed Peter Popoff as a liar, the disgraced televangelist is back. He's now making tens of millions of dollars peddling a supernatural debt-relief scam, according to ABC 7 News in Los Angeles. (Video)

How is that possible?

The JREF's Facebook and Twitter feeds have been buzzing about this, with a lot of people expressing disbelief that any thinking human being could fall for this transparent swindle by a man who is now most famous for being caught in a lie. Why would anyone think they could escape debt by throwing away hundreds or thousands more?

It would be easy to chalk it up to “some people will believe anything,” and dismiss the people who’ve fallen into Popoff’s trap as stupid or gullible. But that doesn’t explain why thousands of people have been taken in by the scam, or help others to avoid making the same mistake.

The reason people believe Popoff isn’t really that they’re gullible people who believe anything. The same people giving money to Popoff may be very skeptical when it comes to the person their daughter is dating, or someone trying to sell them a car. What makes people prone to believe Popoff isn’t some kind of inbuilt credulity. It’s desperation.

Imagine for a minute that you’re driving in your neighborhood and your car breaks down. A bystander approaches you and says he’ll go get his friend who drives a tow truck, and they’ll come back and help you—but he needs $20 for a cab to get to his friend’s place. Would you do it?

Now imagine you’re in a narrow desert canyon 100 miles from the nearest town. You’ve been pinned by a giant boulder for a few days, Aron Ralston-style. You are starving and dehydrated and you probably won’t make it another 24 hours. An opportunistic hiker approaches you and promises to go for help, but only if you give him all the money in your pockets. Would you?

There are several factors at play in these scenarios that all figure into your decision: What’s the worst that could happen if you believe and you’re wrong? What’s the worst that could happen if you don’t believe, and you’re wrong? If the benefit is real, how valuable is it to you? In other words, how desperately do you need it to be true?

Beyond the material costs and benefits, what are the psychological costs and benefits? If you don’t accept what’s being offered, is there an alternative? Even if you think the hiker is probably lying, would you rather live out your last 24 hours in the canyon relieved that you were finally going to be rescued, or cursing yourself and wondering if you threw away your one chance to be saved?

Desperation changes the balance.

The idea of Peter Popoff’s supernatural debt reduction scam, for anyone who is not pinned under a crushing boulder of debt, is sheer lunacy on its face. But for someone who has lost their job, their health insurance, and their life savings to a serious illness, and who is just weeks away from homelessness, Popoff is the only person offering a solution.

It’s a scheme that’s incredibly unlikely to work. But when there’s no other solution available, the alternative is to give up and acknowledge that there is no solution, that your life is shot and it’s only going to get worse.

Popoff’s scheme also costs money. But if that $100 won’t keep a roof over your head for another month, what good is it doing you? If putting everything you can toward your debt wouldn’t even cover the interest, using a little bit to buy a glimmer of hope doesn’t seem like such a bad idea. And once you’ve given a little, Popoff asks for just a little more, knowing that most people will want to honor sunk costs and keep that hope alive.

For skeptics who want to help people defend themselves from predators like Peter Popoff, this presents an serious challenge. If you had the opportunity to intervene—if you had just five minutes to talk with someone on the verge of mailing their first check to a known liar who’s promised that Jesus will make their debt disappear—what would you say to stop them? Would your arguments address their real reasons for believing?

If you would tell them not to give their money to Peter Popoff, what would you tell them to do instead? Would they be better off giving that $100 to the bank that’s about to foreclose on their house anyway, or to the landlord about to evict them? If we have no alternative solution to offer, then our best arguments may boil down to this: false hope is expensive, and hopelessness is free. That’s not a strong selling point.

People need hope. We have a powerful need to feel like we have some control over our fate, even if it is an illusion. That’s why those with the most serious illnesses spend the most money on quack therapies. And it’s why we can’t save desperate people from the likes of Peter Popoff through debunking alone—we need to offer a positive alternative that meets their needs.

For some people, that could be as simple as a referral to a legitimate nonprofit credit counseling service that can inform them of their legal rights and options, which can be hard to find in a sea of similarly-named debt relief scams. Or it could mean connecting them with community organizations, so that instead of turning to a profit-driven church for the support and community they need, they can join together with other people facing similar problems and fight for better jobs and affordable housing. Whatever it is, if we want to demonstrate the value of critical thinking, we need good alternative ideas to which that thinking can lead them—ideas that work better, make them feel more in control of their lives, and give them real hope.