The U.S. consumer market is worth more than $20 trillion, and many companies are determined to get their share of this by hook or crook. It is important to be wary of these scams, so we’ve compiled the 17 most common types of companies known to rip off Americans.
Extended Warranty Services
Extended warranty services promise to safeguard you financially after the manufacturer’s warranty expires. But all we typically get from them is minimal coverage with contracts filled with exclusions. Depending on the product, these warranties also come with extra fees that force you to spend more in the long run.
Timeshare Companies
We see many timeshare companies use high-pressure sales tactics, like promising free gifts and vacations to lure unassuming Americans. And then these companies end up trapping people in unfavorable contracts with large upfront payments and high maintenance fees. It’s so much of a rip-off that CNBC shares how up to 85% of buyers regret getting one.
Pharmaceutical Companies
Ridiculously high prices are a common theme in healthcare in the U.S., and branded drugs aren’t an exception. Pharmaceutical companies charge excessively high prices for drugs that don’t perform better than generic products. If there aren’t any generic alternatives in the market, these prices go up even more!
Auto Dealerships
To increase profit margins, dealerships are known to charge hidden fees that pop out in the final bill that you get – many of these are completely unnecessary. They confuse regular buyers with technical terms and pricing structures and often try to upsell you on things such as a different car, dealer-added options, or extended warranties.
For-Profit Colleges
We see on Business Insider how for-profit educational institutions take advantage of our search for quality education. These colleges use fraudulent tactics, like misrepresenting job placement rates, marketing high-interest loans to students, or even falsifying quality standards for American students, regulators, and investors.
Payday Loan Providers
Payday loan providers use predatory tactics to trap low-income Americans in high-interest, short-term loans – a cycle of debt that’s hard to come out of. Loan sharks (as they’re called) are so much of a scam that they’re banned in 12 states in the U.S. and the District of Columbia.
Health Insurance Companies
Healthcare in the U.S. is a massive financial expense, and even healthcare insurance companies have tricks to get more money out of you. These companies find the tiniest reason to deny your claim, and they also complicate the claim process to reduce the likelihood of a payout or sell you lower on it.
Credit Card Companies
Forbes shares that the APR used to advertise credit cards as only to be offered to 51% of applicants to be legal. Because of this loophole, Americans easily get charged more than they expected on their credit purchases. And we haven’t even mentioned the inflated (up to 40%) interest charged on unpaid annual bills!
Cable Companies
Cable companies start with low rates to get you to use their products, then they exponentially increase prices when obscure promotional periods end. They also make you pay more for content you don’t watch, and charge you unnecessarily high fees despite offering sub-par content compared to streaming services.
Internet Service Providers (ISPs)
The only way ISPs get to rip you off, apart from huge monthly payments, is through your internet speeds. These companies make promises of incredible upload and download speeds that they never fulfill, just to get you to spend money. And what’s worse, they charge you the same, regardless of how fast your internet speeds are.
Fad Diet Providers
Exploiting the enthusiasm around weight loss, you also see some companies market their drugs or drinks with claims that have no scientific backing. These companies use celebrities and sensational testimonies to fabricate authenticity, only to sell products that expose Americans to more health complications than benefits.
Airline Companies
Of course, the airline companies make it to our list! Airlines overbook seats and charge Americans unnecessarily for seat selections and baggage. BTS data shows that as well as this, travelers have to deal with flights that get delayed or canceled over 20% of the time, without any compensation.
Junk Food Manufacturers
Blaming it on ‘inflation,’ snack makers reduce the size of their products and simultaneously increase their prices, just to boost their profit margins. But this isn’t where the scams end. Some also promise specific health benefits, like zero-sugar for instance, and then replace ingredients with equally harmful alternatives.
Furniture Stores
Affordable high-quality furniture isn’t a thing anymore, and furniture stores have found a way to capitalize on this through financing contracts. These stores offer low to zero-interest loans to entice buyers into signing contracts. And then they revert to high-interest charges when technical, almost-hidden requirements aren’t met.
Multi-Level Marketing Companies (MLMs)
The FTC gives out a warning that “most people who join legitimate MLMs make little or no money. Some of them lose money.” More fancily known as ‘network marketing,’ MLM companies are known to run pyramid schemes, selling Americans dreams of financial freedom only to use recruits to make money from courses and sales kits.
Home Improvement Contractors
You know a home improvement company is trying to pull a fast one on you when it charges a large upfront fee before work can begin. After receiving money, these contractors are usually under less pressure to provide quality services or even complete the job, and all you’re forced to do is spend more money than you intended.
Investment Companies Providing Seminars
Compared to the obvious scam of running away with funds invested through them, investment companies have a smarter way of ripping off Americans – by offering training programs. The worst of them use false testimonies to sell expensive ‘exclusive’ courses that only contain generic information from the internet.
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