Realizing you’ve gotten ripped-off is a lousy feeling. Nobody likes to lose money on something useless or realize they’ve fallen for a scam. Unfortunately, many companies look to take advantage of consumers and sell them something they don’t need, will never use or something overpriced. During National Consumer Protection Week, take a look at these common ways that you could be ripped-off and keep them in mind as you shop.
Extended Warranties on Electronics
If you’ve bought a new electronic device recently, you’ve probably been asked in the checkout lane whether you want to purchase an extended warranty to cover repairs in case you break it. But according to Consumer Reports, these extended warranties are almost never a good idea and usually contain “gotcha” policies that mean you won’t get anything in return. While it can be comforting to think you won’t have to shell out money if your new device breaks, most of the time, a warranty will cost more than the out-of-pocket price you’d pay for the repair. And the exclusions will probably mean your device isn’t protected from accidental damage or that certain parts (usually those that are most likely to break!) are excluded from the warranty. For example, Consumer Reports found a refrigerator warranty that excluded “icemakers, beverage dispensers, door seals and gaskets, hinges, lighting and handles” and vehicle service contract that left out “brake drums and rotors, air bags, door handles, lock cylinders, the exhaust system, body panels” and more. What’s left to fix? As blogger David Pegg at List25 wrote, “How much sense does it make to pay for a repair before you break something?”
Gift Cards and Prepaid Cards
Gift cards are a hugely popular holiday gift, and for good reason. It’s fun to get money to spend and easier than agonizing over whether you’ve picked the right thing. But gift cards can often come with some fine print that can make them not so jolly, so be careful. For example, many gift cards get stuffed in a wallet or a drawer and forgotten about. By the time you’ve found them again, they may have expired. According to research group CEB, $1 billion in gift cards goes to waste every year when the value expires. If you’re buying a gift card for someone else, look for stores where gift cards don’t expire or at least have longer period to use the balance.
Another popular new choice is the prepaid card, where you can load a balance of cash on a card and use it almost like a debit card without a bank account. These cards can be useful, but beware the hidden fees. Unlike your bank, prepaid cards can often charge you a long list of fees, such as activation fees, monthly fees, transaction fees, cash withdrawal fees, balance inquiry fees, fees to add funds, fees for not using your card, overdraft fees and more. Before you load money onto a prepaid card, consider how much it might cost you and whether it’d be better to keep your cash to yourself.
You want to take good car of your car, so it seems like premium gas could be a good investment, keeping your car running longer and better. But according to AAA, premium gas doesn’t really work any better or do anything for your car compared to regular gas. On average, premium gas costs 50 cents more a gallon, and AAA estimates that Americans wasted $2.1 billion on it last year. Unless your car requires premium gas, it’s not worth the extra money you’re spending.
You’re looking to start or advance a career, and the advertisement from the online university or local branch of a for-profit college sounds so appealing – classes at convenient times, geared towards working folks and “guaranteed” to help you get ahead. But data has consistently shown that for-profit colleges are more likely to leave their students with a pile of debt and still without a job. Federal rules track how much students are making post graduation vs. their debt and flags any institution where student debt exceeds 8 percent of their total income. Of the 800 schools flagged for this problem, 98 percent of them were for-profit colleges. If you’re considering a for-profit school, do your research by checking the school’s track record and researching complaints, says Consumer Reports.
Paying for Your Credit Score
The Consumer Financial Protection Bureau recently fined credit-giants Equifax and Trans-Union for selling consumers credit scores that may not have been accurate. Instead of using the FICO credit score, which calculates your credit score based on the top three bureaus, these companies were selling credit scores based on their own in-house calculations, which were often quite different than the real scores lenders were using to evaluate the consumer. There are plenty of ways to get your credit score for free, so you should never need to pay for it. You can get a free credit report once a year by visiting annualcreditreport.com. Also, these days many banks, credit cards and financial service companies will help you get your credit score for free as well. There’s no reason to pay for information about yourself, so don’t get scammed!
Get Help When You Get Ripped Off
If you’re wondering if you got ripped off in a recent purchase, consider hiring a lawyer if the situation warrants it. Texas Legal’s plans cover consumer law issues and consultations, allowing you to speak to a lawyer about whether your case requires legal action. Often, just a letter from a lawyer on your behalf is enough to move a company to give you a refund or deal with your issue. Learn more about Texas Legal’s group and individual legal protection plans for Texans.