These companies are notorious for their price hikes and their hidden fees, making it difficult for customers to get out of contracts. Americans should do their research before giving their money to these 17 types of companies. Some of them are best avoided altogether.
Payday Loan Providers
NerdWallet writes, “Payday loans are small, expensive loans you repay all at once, typically on your next payday.” Payday loan providers charge exorbitant interest rates exceeding 400% annually, trapping often desperate borrowers in a cycle of debt.
Subscription Boxes
Subscription box companies offer customers regular deliveries of boxes containing meal kits, personal care goods, and tech gadgets, among other products. However, they often make it challenging for customers to unsubscribe, making them jump through seemingly endless hoops.
Credit Repair Agencies
Credit repair agencies are known for their questionable tactics, making false promises to customers desperate to improve their credit scores. They regularly charge high fees for their services, and even well-meaning companies struggle to improve credit scores because they can only dispute inaccurate credit report information.
For-Profit Colleges
In an opinion piece for the New York Post, John Stossel argues that “college is an overpriced scam,” noting that almost half of “students given loans don’t graduate even after six years.” Institutions often exaggerate employment prospects and salary potential to attract students, who often graduate with crippling student debt.
Timeshare Companies
Ten million households in the U.S. own timeshares, properties with multiple owners. However, timeshare companies are known for their misleading, high-pressure sales tactics. CNBC writes that “owners often struggle to exit their contracts” and that “even after the timeshare is fully paid off, the owner is accountable for rising annual maintenance costs.”
Extended Warranty Providers
PCMag warns against wasting money on extended warranties, writing that “companies aren’t offering extended warranties out of altruism. They’re doing it because service plans make crazy amounts of money.” Warranties are often filled with exclusions that limit the company’s liability, offering consumers minimal protection.
Multi-Level Marketing (MLM) Companies
Multi-level marketing companies are infamous for their unsustainable business models and the financial loss most participants experience. Success stories promoted by these companies often lead to eager recruits working for next to no pay, and many MLMs are pyramid schemes.
Debt Settlement Companies
While debt settlement companies can help debtors, they are infamous for their deceptive practices and long-term negative impact on customers’ credit scores. Experian warns of the risks posed by debt settlement companies, including “potential charge-offs, settlement company fees, possible scams, and the overall risk of settlement offers not working.”
Internet and Cable Providers
Internet and cable customers are often surprised by hidden fees and sudden price hikes after initial promotional periods end. These providers are known to artificially inflate prices, making it harder for customers to purchase only what they need, and are infamous for their poor customer service.
Junk Fees in Various Industries
Hotels and resorts in the U.S. are infamous for adding undisclosed fees, for example, drinks in the mini-fridge, that can significantly increase the cost of a stay. Events selling tickets add excessive service and convenience fees that often amount to a high percentage of the original ticket price, ripping off Americans trying to watch their favorite artist.
Bottled Water Companies
The Independent notes that Americans and Chinese consume the most bottled water and points to research that suggests “the stuff in a bottle is not better for you than the stuff in your tap.” Marketing and branding allow companies like Fiji and Evian to charge exorbitant prices for regular water.
Marketed Medicine
Marketed medicines are branded versions of much cheaper medicines with the same contents. The FDA explains that “a generic medicine works in the same way and provides the same clinical benefit as the brand-name medicine.”
Rental Car Companies
Hertz, Enterprise, and Alamo are known for their insurance, pick-up, and reservation fees. The COVID-19 pandemic also caused supply chain issues when car rental companies sold parts of their fleets to stay in business, further inflating prices.
Convenience Stores
Convenience stores will sell items for a much higher price than supermarkets, forcing consumers to pay a premium for their convenient location and long opening hours. Convenience store items are often of lower quality than those of their supermarket counterparts.
Mobile Games
Mobile games are infamous for their in-app purchases, making millions of dollars off children and teenagers. Parent Zone warns that “the techniques employed to monetize” people playing mobile games are “increasingly sophisticated—and sometimes cynical.”
Car Mechanics
Car mechanics are infamous for ripping their customers off, charging them for work their car doesn’t need, and sometimes charging them for work they didn’t do. Americans should learn about their vehicles to avoid getting overcharged by mechanics.
Gyms
Gyms will make it almost impossible for their customers to cancel memberships and will often hide fees in their contracts. Some chains will charge customers for an extra month’s membership when they cancel.
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