I've seen the mugging go the other direction as well on fixed-cost, particularly in extremely large contracts; companies put low-bids in, then charge exorbitant rates on even the smallest changes to the requirements (and there are always changes). And with non-fixed price projects, the mugging in the other direction is even easier. People in IT don't pay nearly enough attention to reputation.

But yeah. It's very easy for individuals and small companies to get caught in this, especially if, say, your mortgage payment is due soon.