More Rip-Offs, Scams And Swindles!

As readers seem to lap up our warnings about everyday rip-offs, we've come up with twenty more swindles to shun.

Around Easter this year, I wrote three articles which warned of seventeen illegal scams, swindles and rip-offs which entice people into parting with their money. These articles proved very popular with Fool readers, so here they are again: Steer Clear Of These Scams, Five More Scams To Shun and Scams: The Next Chapter.

In July, I followed up with Ten Infuriating Swindles, which listed some of the legal but annoying rip-offs which we Brits are forced to swallow. Again, this article proved hugely popular and generated scores of comments on our feedback board.

Therefore, as you seem to enjoy reading articles of this kind (and I certainly enjoy writing them), here are twenty more which Fool readers have identified. I'll start with ten now (in alphabetical order), and the second batch will follow later this week. Enjoy!

1.    0870 numbers

I dislike 0870 numbers because they are so expensive to call -- around 8p per minute. Therefore, these calls aren't charged at ‘local rates', as is often claimed. They are, in effect, premium-rate calls. Rather than calling 0870 numbers, look for geographical alternatives on Say No To 0870, which also provides alternatives for 0845 listings. By the way, if your business advertises an 0870 number for customer services, then you'll never get my business. It's as simple as that!

2.    BACS transfers

I haven't used a cheque book for at least four years. Instead, if I need to transfer money to someone else's bank account, then I send it directly via the BACS system for inter-bank payments. The annoying thing about BACS is that it takes three working days for a payment to clear, but the money is debited from my account on day one.

In other words, the banks benefit from a three-day ‘float' of cash, which boosts their annual profits by hundreds of millions of pounds. Alas, an improved BACS system due to be introduced next month has been pushed back into 2008. Now who would have predicted that would happen, right?

3.    Commercial cash machines (convenience ATMs)

Several local shops in my area have installed ‘convenience' cash machines, which charge a fee for withdrawing cash. Typically, withdrawing £10 will incur an extra charge of, say, £1.85, adding almost a fifth to the cost of getting a tenner. Personally, I avoid these ATMs in all but the very gravest emergencies.

4.    Consumer electronics and computer software

Why do consumer-electronics firms and software companies think that one pound equals one dollar? PCs, games consoles and software cost much more in the UK than they do in the US or Far East, even after accounting for tax differences. Thus, a $400 games console in the US costs £400 in the UK, not the £200 that the dollar-sterling exchange rate would indicate. What a con!

5.    Cosmetics and beauty products

(I must point out that this rip-off was brought to my attention by a female Fool!)

It seems to me that the whole advertising industry exists to make people -- especially girls and women -- feel unhappy about the way they look, dress and feel. In particular, making women anxious about their appearance allows multi-national corporations to sell them vastly overpriced beauty products which are mostly water, grease and a fragrance. Frankly, if I hear another advert talking up "pentapeptides" or similar hogwash, then I'm going to open a vein. For antidotes to all the pseudo-scientific drivel behind beauty products, visit Bad Science and Sense About Science.

6.    Extended warranties

In 2005, the rules governing the sale of extended warranties for household appliances and electrical goods were tightened up. Alas, this new system has failed to reduce the cost or improve the quality of these awful protection products. Having seen how profitable these schemes are as an insider, I've never bought an extended warranty on the high street. What's more, I expect that I never will!

7.    Mortgage exit arrangement fees

About fifteen years ago, a typical mortgage would include an exit fee of £50 to cover the lender's costs when a loan ended or moved to a rival lender. However, lenders ramped up these fees in order to make bigger profits when people moved their home loans. Indeed, until this year, fees of £250+ were not uncommon.

However, the Financial Services Authority took a dim view of this profiteering, and ordered mortgage lenders to treat their customers fairly. If you've been overcharged when moving your mortgage, a simple telephone call, email or letter should secure a refund. If it doesn't, then do complain in writing to your lender and, if necessary, the Financial Ombudsman Service.

8.    Payment protection insurance (PPI)

I've been knocking payment protection insurance for almost five years, but this scam remains alive and well today. What's more, PPI providers are still enjoying profit margins of 80% to 90% and trousering about £5 billion a year from selling this massively overpriced junk. The simple solution to this problem is not to buy rip-off insurance to protect your monthly repayments for your mortgage, personal loan, credit and store cards, etc. Instead, shop around for Best Buy PPI from independent providers, such as British Insurance.

9.    Per-minute call charges

I think it's unfair for companies to charge for telephone calls by the minute. If I make a call lasting 61 seconds, then I expect to be charged for 61-second call, not a two-minute call. After all, why should I pay for 59 extra seconds which I didn't use? Of course, if a phone company has this kind of tariff, then I won't give it my custom.

10. Vending machines

Everyone knows that ‘convenience costs', but should it really cost so much? As your local newsagent can't hope to compete with Tesco on price, he has no choice but to charge more for those racks of sweets and crisps. However, with vending machines, the mark-ups seem disgracefully high. A 500ml bottle of Coca-Cola costs 77p in Asda, but most vending machines charge at least £1.50 for the same bottle. That's a 95% mark-up on the supermarket price. Ouch!

So, that's ten down and ten to go. By the way, if you leave feedback on the board below, your pet hates could appear in part two of this article, so feel free to click on the ‘Give feedback' link below.

Finally, thanks for listening to my outburst -- I feel much better now!

More: Fed up with rip-offs? Then find a better credit card, current account, mortgage and savings account today!