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In today’s world, we work hard for our money and want it to go as far as possible.
However, many products and services promise to improve our lives but are actually a complete ripoff.
With extremely inflated prices and hidden fees, not to speak of false advertising and poor-quality items, it can be overwhelming to know what is legit and what is a scam.
We have compiled 24 of the biggest ripoffs that consumers should avoid at all costs.
We chose to spotlight these 24 ripoffs because they have the potential to negatively impact your finances the greatest.
So get ready to take notes as we explore astonishing truths about some of the most common scams and ripoffs you should avoid at all costs.
1. Extended Warranties
Topping the list is the extended warranty for cars and other products you buy.
Even though it costs more than the unusual warranty, it seldom covers much more than the usual warranty.
There are typically all sorts of exceptions buried in the fine print. If the warranty is accepted, you may be required to pay a service fee, so you still pay out of pocket for the repair. While some argue this price is less than if you didn’t have coverage, you also need to consider how much you paid for coverage in the first place.
2. Overpriced HDMI Cables
Some consumers are attracted to the idea that more expensive HDMI cables offer better picture and sound quality.
But in actuality, a $5 cable does the same job as effectively as a $50 one, and while gold-plated connectors may seem fancy, they are not worth the money.
Sadly, in most cases, you are paying a premium simply because of the name brand. And something many people don’t realize is that while you might think that 8K cable will offer stunning images, most cable and streaming companies don’t broadcast in this format, so you will not get that crisp of a picture no matter what high-end cable you use.
3. Pricey Printer Ink
It’s no secret that many name-brand printer ink can be very expensive.
But did you know that generic options are often just as good and can save you a significant amount of money?
Many users claim that some generic cartridges even outperformed brand-name ones.
Printer companies caution users against using generic ink, warning that doing so could void the warranty. However, since most printers are now seen as disposable items you need to replace every few years, this should not worry most people.
4. Identity Theft Protection
Do you get offers for identity theft protection that promise to keep your identity safe?
These services often only do what you can easily do for yourself, like keeping an eye on your credit report and setting up fraud alerts, but they charge you high fees.
Many assume they protect your identity from getting stolen, which is not the case; they alert you when it happens and then offer solutions to help you recover.
5. High-Interest Payday Loans
If you have ever been in a tough financial spot, a payday loan might seem like a lifeline, but it often turns out to be a trap.
With interest rates topping 300%, borrowers can easily get stuck in a never-ending cycle of debt. The reason is that most people who take them out are struggling to get by, so when it comes time to repay, they don’t have the money. If they are able to repay, they use the cash for living expenses. With that cash gone, they must take out another payday loan.
6. Name Brand Prescription Drugs
Just because it has a name brand doesn’t necessarily mean a product performs better.
Recent studies have found that generic drugs are just as good as brand-name ones. Because of this, it is always wise to ask your doctor if a generic version is available when writing a prescription.
Furthermore, the same idea applies when shopping for over-the-counter medicine. You can save a lot of money by buying the off-label or store-brand version. They all have the same active ingredient, so you are essentially getting the same thing, just less expensive.
7. Credit Repair Services
If your credit is in trouble, you may consider using credit repair services that promise to fix your credit score quickly.
Credit repair services offer little more than what you can do on your own, such as fixing credit report errors and boosting your credit score by making on-time payments and paying off debt.
8. Weight Loss Supplements
Weight loss products always advertise their latest and greatest formula that guarantees quick weight loss.
However, the FDA often does not regulate these supplements, and few have scientific evidence to support their claims.
Plus, they can be dangerous and have harmful side effects, too. In most cases, they take the most extreme examples of success and promote them as usual, misleading you. At the same time, in small writing, they cover themselves by stating that results are not typical and that your experience may vary. Sadly, most people get pulled in by the success story and ignore the warning.
9. Cable and Satellite Packages
If you still use cable or satellite instead of streaming services, you may be paying unnecessary hidden fees and high monthly bills.
Many cable and satellite companies take advantage of consumers by offering “bundle” packages that include services you won’t even use but still charge you a higher price.
Another trick is having you agree to a contract. They fix your price for two years, but when the contract ends, the price skyrockets.
Finally, if you call to ask for a lower monthly rate, they will offer you additional channels at the same price. You think you are getting a deal, so you accept, not realizing they tricked you out of your goal of trying to lower your bill.
10. Brand-Name Fashion
The cost of high-end brand-name fashion is often inflated due to the brand name itself.
In many cases, you are simply paying for the label and not necessarily better quality. Shopping around lets you find a comparative or even better product for a fraction of the price.
11. Mystery Shopping Schemes
If you are asked for an upfront payment or personal information when signing up for a mystery shopping job, it is likely a scam.
Legitimate companies will never ask for money or personal information upfront, so always research any company before signing up for mystery shopping opportunities.
12. Timeshares
Have you ever been offered a timeshare that sounded too good to be true with its offer of a great way to ensure affordable, regular vacation options?
In reality, it probably was a ripoff because many timeshare opportunities come with hefty maintenance fees, their value depreciates, and it can be challenging to sell if you want out.
If you are sitting for a presentation and cannot understand how it works or the cost, don’t give in to the sales pressure and walk away.
13. Car Cleaning Services
If you love your car to be spotless, you have probably fallen victim to car cleaning services that claim to provide professional cleaning.
You can do the same job for a fraction of what these companies charge with just a few cleaning products and a little elbow grease.
Plus, if you regularly wash, wax, and vacuum your vehicle, it will be easy to clean since dirt doesn’t have time to build up.
14. College Textbooks
College textbooks can be a major expense for students, especially if they buy them from university bookstores.
However, they can save money by renting or buying used textbooks online or by joining a book exchange program to sell their books and buy the ones they need at a lower cost.
15. Bank Overdraft Fees
It is as if banks want to add insult to injury when you have insufficient funds in your bank account.
While your bank will often cover the difference, they charge you a fee for every transaction that puts you in the negative, which can add up.
Many offer a service where if you have a savings account, they will transfer the money needed to cover the overdraft to your checking account free of charge. The downside is that most traditional banks pay very little interest, so only keep a small amount in your savings to cover the potential overdraft and the rest in a high-yielding savings account.
16. Anti-virus Software
We all want to protect our computers from viruses and malware, but anti-virus software can be expensive.
Free anti-virus software is just as effective as paid versions, so why spend the extra money?
17. Gym Memberships
One of the ripoffs consumers often fall for is expensive gym memberships that they never use.
You don’t have to go to a fancy gym to get and stay in shape; you can exercise at home, walk, or jog around your neighborhood. Body weight exercises are an excellent way to maintain muscle without home gym equipment.
18. Designer Glasses
While you may like wearing designer glasses, you are paying for the brand and not necessarily the quality.
It is better to focus on finding a pair of glasses that fits your face and budget instead of paying a higher price for designer glasses that look no different from non-designer ones. Luckily, many low-cost providers have come onto the scene, so finding a pair that works for you should not be too difficult.
19. Premium Gasoline
Check your car’s user manual before paying for premium gas; you are likely throwing money away by buying it.
Most cars are designed to run on regular gasoline, and using premium gas will not provide any added benefits except less money in your wallet. Only a few premium models require higher octane gas. And even then, you can likely get away with using regular now and again, as the car’s computer will make adjustments on the fly.
20. Cash Advance Fees on Credit Cards
Using your credit card for a cash withdrawal might seem handy, but beware of the hefty cash advance fees and instant interest charges that don’t come with a grace period.
The amount of these fees is a ripoff, and it’s best to avoid them unless absolutely necessary. If you’re in a jam and need some cash, consider selling things around your house you don’t use or offering to do small jobs like lawn mowing to earn what you need.
21. Store Brand Credit Cards
Store-brand credit cards usually have higher interest rates and lower credit limits than traditional credit cards.
They sometimes offer discounts on purchases to get you to buy more than you would if you were paying cash, and if you don’t pay the balance in full each month, you are stuck with high interest charges.
22. Tech Warranties
Retailers often try to sell you tech warranties or insurance on your purchases, but they are not usually worth the additional cost.
Most products come with a regular manufacturer’s warranty that covers any defects for some time, but these so-called extended warranties have numerous limitations. For smaller items, you will have to ship the item to a warehouse in an attempt to repair it, which could take weeks. For larger items, a technician will come to your house to make the repair.
In only a few cases will they replace the item for you.
23. Same as Cash Deals
These deals work by not charging interest for a set amount of time, like six months or one year. But don’t be confused into thinking there is zero interest; it is simply deferred.
While a period of no interest might seem appealing, reading the fine print is important.
To avoid paying interest, you must pay off the balance in full before the offer ends. If you don’t, you will pay interest on both your remaining balance and the previous balance, which could result in you owing hundreds of dollars in interest.
24. Buy Now Pressure
When a store promotes a limited-time deal or hints at low stock, it’s just a tactic to encourage you to buy immediately.
Do your research and compare prices at different stores before buying; you may even find a better deal than the “buy now deal” elsewhere.
25. Debt Settlement Companies
Many debt settlement companies promise to get you out of debt. While some exceed, what they leave you with is ruined credit.
Many work by having you stop making monthly payments. This allows them to contact your creditors and negotiate for a settlement amount. Once this is done, you pay one payment a month, and the debt settlement company distributes that money to each creditor until your balances are paid in full.
However, if you don’t make payments initially, your credit score will go down. Also, the fee to the debt settlement company is embedded in your new monthly payment.
You are better off making a plan to get out of debt and negotiating with creditors yourself.
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I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.