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Written by the frugal nomad   
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There must be a thousand rackets out there to fleece consumers out of their hard-earned dollars. Everybody gets ripped off. It’s nothing to boast about but I’ll admit to being a victim to half of these scams. We’ve tried to whittle it down to the dirty dozen - the ones that should be considered high crimes and misdemeanors - highway robbery by any other name. OK, a few of these might not rise to that level, but they'll still put a dent in your wallet.

Personal Finance

1. Pay Day Loans

When you annualize the rates and the fees, Pay Day Loans can accrue at rates as high as 700%. A few short decades ago, charging these astronomical rates was considered criminal activity. Now they're marketed as a "convenient service" for people struggling paycheck  to paycheck. Right, the only thing these things help is to keep people in a cycle of debt.

2. Check Cashing

9 million American households don’t have checking or savings accounts and when they need to cash their paychecks - they can end up paying stiff fees. Of course, when you consider late charge and overdraft fees, even the Pay Day rackets make banks look like the Cosa Nostra.

3. Currency Exchanges

It's all about location, location, location. Avoid them at airports and anywhere in Paris. If you're ever in a mood to be swindled, change currency at an airport. Not only is the spread between the buy and sell price ridiculously wide, they’ll charge you outrageous transaction fees to boot. Many credit cards also tag on unreasonable fees when you use them to withdraw cash. Word to the wise, when you're travelling abroad, use your debit card for cash withdrawals and your credit card for everything else. And the Parisians? They have a real knack for ripping off tourists with those currency exchange kiosks - especially the ones near major attractions.

4. Extended Warranties

Just say no. If you’ve done your research, the regular warranties are sufficient. Whether you’re talking about electronics or a car, if there’s a major defect or something malfunctioning - you’ll usually find out about it while the standard warranty is still active.

5. Rent-To-Own

It’s hard for me to even discuss this business because it’s so shady. Rent last year’s model of TV and have the right to buy it for three times the current price after paying 24 months of outrageous fees. Yeah, that’s sounds like a good deal. Rent-A-Centers are the first refuge of a sucker.

 



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Maggie@SquarePennies  - Everyday Ripoffs |2011-11-12 22:02:55
I have to add those car companies who will sell you a car even though you have terrible credit. The interest rate they charge and the poor credit skills of the car "buyers" make it extremely likely the buyer will have the car taken back for being unable to make the payments. It's a classic rip-off!
Sandy  - Currency Exchange |2010-12-22 20:20:52
I know that this is called everyday rip offs. I don't know how every day currency exchanges are. That only happens when you travel to different countries.
Corina  - Everyday Ripoffs the Dirty Dozen |2010-12-03 11:47:25
thanks for this 6, 7 and 8 made me LOL.
uceredirect  - DIY Extended warranty |2010-10-06 00:29:23
When they offer you an extended warranty, find out how much it is. Don't buy it, but instead take that amount and put it in savings, or better yet in a GIC (CD for you 'Mericans, right?) for the term of the regular warranty. I just keep a separate account where I put all these 'extended warranty' charges. If something needs to be repaired or replaced out-of-warranty, it comes out of that fund rather than regular accounts. Once you have made 3-4 purchases and done this little trick, you'll have a self-sustaining extended warranty fund that will be able to cover any repair or replacement to any of your 'covered' purchases. Best of all, it doesn't expire!

Take what would have otherwise been a nice easy extra profit for the store and turn it into an interest-generating investment that gives you the same (or better) coverage.
uceredirect  - DIY Extended warranty |2010-10-06 00:28:35
When they offer you an extended warranty, find out how much it is. Don't buy it, but instead take that amount and put it in savings, or better yet in a GIC (CD for you 'Mericans, right?) for the term of the regular warranty. I just keep a separate account where I put all these 'extended warranty' charges. If something needs to be repaired or replaced out-of-warranty, it comes out of that fund rather than regular accounts. Once you have made 3-4 purchases and done this little trick, you'll have a self-sustaining extended warranty fund that will be able to cover any repair to any of your 'covered' purchases. Best of all, it doesn't expire!

Take what would have otherwise been a nice easy extra profit for the store and turn it into an interest-generating investment that gives you the same (or better) coverage.
MB |2010-05-20 16:15:34
Beware of using debit and credit cards abroad because they will charge you foreign transactions fees and you might end up having your credit number stolen.
frugal nomad  - Amen to that |2010-05-20 16:24:09
I once got home from a trip to Italy and found somebody had charged a few thousand dollars for industrial strength floor cleaning equipment from a supplier in Spain. It was a major hassle. The funny thing is they seemed to know exactly how much to take out and not wipe out my account. I'm still puzzling over how they managed to do that. I got the charges removed but not before experiencing a bit of trauma. It's much safer to use cash as much as you can.
 
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