Not all companies have your best interests at heart. Recently, a growing number of businesses have been using hidden fees, false promises, and deception to exploit customers. It’s important to stay vigilant when dealing with companies, and to help you out we’ve curated a list of 17 types of companies that are known for ripping off Americans.
Payday Loan Companies
Payday loan companies often have high interest rates and fees and predatory lending practices. They deliberately target financially vulnerable individuals to exploit them. The Guardian reports that payday loan brokers regularly raid the bank accounts of customers suffering from poverty.
For-Profit Colleges
Misleading job placement statistics, high tuition costs with low graduation rates, and large student loans with poor return on investment mean that many for-profit colleges can be highly exploitative and rip off American students.
Debt Settlement Companies
Debt settlement companies typically have high upfront fees with no guarantee of success, with the added potential for increasing debt due to interest and late fees. They make false promises of reducing debt by significant amounts, which causes a lot of unsuspecting victims to be ripped off in the long term.
Car Title Loan Companies
Car title loan companies have extremely high interest rates – sometimes exceeding 300%, and the risk of losing the car for non-payment. These companies target and rip off low-income individuals in need of quick cash.
Timeshare Sales Companies
Timeshare companies may use aggressive and misleading sales tactics and high maintenance fees with limited flexibility. It can then be difficult to resell or exit timeshare contracts, which puts victims of these companies in a challenging position.
Extended Warranty Providers
Exclusion-heavy terms that rarely cover repairs, high upfront costs with questionable value, and difficulty processing claims or receiving payouts lead to many Americans being ripped off when dealing with extended warranty providers.
Pyramid Schemes
Investopedia describes a pyramid scheme as a fraudulent and unsustainable investment pitch that relies on promising unrealistic returns from fake investments. They are known for promising high earnings with little effort – that may attract many vulnerable people.
Robocall Scammers
Many people experience unsolicited calls from scammers who offer fraudulent services or products. They employ various techniques to trick or pressure people into paying and sometimes use fake caller IDs to seem legitimate.
Fake Charity Organizations
Fake charity organizations may request donations under false headings, with little to none of the money received going to charitable causes. These organizations can be very successful at deceiving people with the use of emotional triggers.
Credit Repair Companies
Credit repair companies may make promises of improving credit scores quickly, however, they employ tactics that can backfire and damage credit further. They usually have high upfront costs, with little real impact on credit.
Home Improvement Scammers
Offers for services without proper licensing or insurance can lead to unfinished projects and poor work quality. Scammers usually have inflated charges for basic tasks and repairs, which is why it pays to do your research when dealing with home improvement companies.
Weight Loss Product Scammers
Weight loss products are marketed to provide quick weight loss, but they don’t have any medical backing. Sometimes they can also contain unapproved or even dangerous ingredients. Forbes says there are several warning signs of a scam, such as specified timeframes, overly steep discounts, and money-back guarantees.
Data Breach or Identity Theft Companies
Many of these companies offer false claims of data protection or identity monitoring. They charge high fees with little security, and often there are serious difficulties in canceling signed-up services.
Financial Investment Scammers
Financial investment scammers make false promises of high returns with low risk and use overly complex investment schemes to target certain demographics – such as retirees or those hoping to grow their savings.
Subscription Services
Some subscription services are known for ripping off Americans by having automatic renewals without clear notification, hard-to-find cancellation procedures, and bundling with other services to increase costs. According to The Independent, subscription traps cost consumers billions per year and are worsening.
Rent-to-Own Companies
High interest rates on long-term payment plans make the end cost of rent-to-own offers significantly higher than retail value, often leading to items being repossessed when payments are missed.
Telemarketing Companies
Telemarketing companies frequently make unsolicited calls with deceptive offers or threats and tend to request personal information or payment details. These companies are known for targeting the elderly or vulnerable individuals who may be unaware of this type of scam.