Does it feel like you’re being scammed every time you open your wallet, pay a bill or take a trip? Most companies can’t raise prices during a recession because they risk driving away business. Instead, they employ all kinds of sneaky (but legal) ways to take advantage of consumers.
Result: You get gouged by hidden fees, obscure rules, misleading come-ons and billing “mistakes.” My secrets for fighting back against today’s most infuriating rip-offs…
Credit card companies continue to come up with ingenious ways to get your money.
The latest: If you pay part of your bill before the due date and carry over the rest as a balance, it’s logical to assume that you’re charged additional interest on only the unpaid portion. But more than one-third of banks now calculate interest for the month by basing it on the account’s average daily balance for the past two months. In other words, you get charged interest on money that you’ve already paid back!
How to fight back: Consider dumping or not using any of your cards that have this “double- billing cycle.” Check the fine print of your credit card statement. Look in the disclosure box for the entry under “Method of Computing the Balance for Purchases” to see if it says something like “Two-Cycle Average Daily Balance (including new purchases).”
In most states, the sales tax you pay on your car repair bill is applicable only to charges for the parts that your car needed and the supplies that the shop used (for example, lubricants and rags). Labor is not taxable if separately stated from the repair parts on the customer’s invoice.
Lazy or unscrupulous auto-service facilities may write down just one amount on the bill and charge you sales tax on that total amount. A 5% sales tax misapplied to a big job that included $1,000 of labor takes an extra $50 out of your pocket.
How to fight back: Ask that your bill contain separate charges for labor and parts/supplies. Check that sales tax is charged only on the parts/ supplies portion of the bill.
Even well-meaning hospital staff can inadvertently jack up your bill. They make suggestions to alleviate your pain, inconvenience or worry without realizing that it will cost you more.
Examples: I knew an elderly man in intensive care who was ready to be moved into a regular room. There were no rooms available. A doctor suggested that it was a slow night in the intensive care unit (ICU) so there was no problem with the man remaining there. The man felt grateful until he realized that additional costs had been tacked on to his bill — he got charged for spending more time in the ICU. I also heard of a frightened child who was calmed when a nurse gave him a little teddy bear. The teddy bear was billed at $57.50 as a “cough support device.”
How to fight back: Be wary of simply accepting extra services from doctors or nurses that are clearly not needed — even if they imply that they’re doing it as a favor. Unless you get them to call the hospital accounting department to obtain authorization for a free service, you’ll likely get charged according to the usual hospital guidelines, and your insurance company may refuse to cover the additional amount.
Gift cards have become much more difficult and inconvenient to redeem because of restrictions on how they can be used.
Examples: Starbucks gift cards are not accepted at many Starbucks outlets in airports, supermarkets and bookstores. Some MasterCard and Visa gift cards that you buy online charge you a $6.95 delivery fee and you are allowed to check your balance by phone for free only twice. Many gift-card issuers won’t replace the card if you lose it or they require that you know the card’s ID number.
How to fight back: Sell your unused gift card for cash, or trade it for a different gift card for a comparable amount. You can now swap or sell it online at sites such as Swapagift.com and CardAvenue (www.cardavenue.com).
Example: Say you get a $200 Dell Computer card as a gift, but you don’t need it because you already have a computer. CardAvenue lets you post an advertisement to sell your gift card for full value or less. You can also exchange your $200 Dell card for one from, say, Banana Republic or J. Crew.
Cost to advertise: About $10.
Also, understand the replacement rules for your gift card if you lose it. Make a copy of both sides of the card (and make sure the ID number is readable). Report a loss as soon as possible, because you’re responsible for any transactions on the card before it’s reported missing. If an issuer replaces the card, expect to pay a fee, typically $15.
In this economy, marketers are using rebate come-ons aggressively. Rebates are very attractive to cash-strapped consumers. So why are four out of five available rebates never redeemed? It’s because manufacturers and stores purposely make the redemption process hard.
How to fight back: When you see an advertised price, make sure that you understand any rebate offer so you can jump through all the hoops to secure your rebate. Keep the box the item came in, as well as copies of the receipt and all the paperwork from the rebate offer, until your check arrives. Send in your rebate materials by “certified mail with return receipt requested” if the rebate is sizable ($20 or more). That way, you have evidence that your submission was delivered if the processing company claims that it was never received. Typical cost for certified mail with return receipt is $2.25 to $5.
If you don’t receive your check in the time frame promised, call the number on the rebate form and make a fuss.
If the phone call doesn’t get you results, send a polite letter, with copies of the rebate material you mailed in, to the manufacturer and the store where you purchased the item. Write: “My decision to purchase your product was based on your offer of a rebate. My purchase constituted an acceptance of that offer. If I don’t receive my rebate check within 30 days, I will complain to the Federal Trade Commission and my state attorney general.”
Rental-car businesses count on harried travelers being too distracted to notice inflated bills.
How to fight back: Return the vehicle on time. Grace periods for late returns are shrinking. If you roll in one second past 30 minutes after the scheduled return, you may well get charged an extra day.
Use every discount available to you. For instance, membership in AAA, USAA, AARP, Costco or Sam’s Club will qualify you for a 15% to 25% discount at most major rental companies. For additional coupons, visit www.rentalcarmomma.com and www.rentalcodes.com.
Don’t choose the “buy a full tank of gas up front” option, since it’s inevitable that you’ll return the car with some gas in it, thus giving free gas to the company.
