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Originally Posted by Solicitous
It is actually quite amazing what does go on. I did some law subjects for Uni and it was quite shocking just how little I knew about my consumer rights and statutory legislation, and just how companies play on the ignorance of customers not knowing these facts and exploit to their own benefit.
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Here is one that has always amused me.
I sometimes get a letter from the bank giving me an "option" to pay my morgage that would save a lot of money on interest. I'm sure most people here have gotten this letter before. Basically, instead of a monthly payment you pay them $400 or so to get into this program to pay bi-weekly. The advantage of this is that over the life time of your morgage payment of 30 years or so you'd save $50k or so on interest. Ok, that sounded nice, but here are several things that most people don't know.
(1) Based on the system, there is absolutely nothing to prevent you from voluntarily make bi-weekly payment on your own to save on interest. Since it's compounded monthly in either case, you can just do this without having to sign up into their program. So, why pay them hundreds of dollars when you can just do this on your own?
(2) If you get into their program, then you are obligated to pay bi-weekly. Any late payment would result in a penalty, and this is exactly what they want. Penalty could be anything from a ridiculously high late fee to an increase in your interest rate. In other words, you're paying them hundreds of dollars so there would be more chances for you to be late on a payment and therefore have to pay them more money.
People actually fall for this legal scam. People actually think it's a good deal when it's really not.
I often have to explain this to people. I really like capitalism because I believe it's the best system that's available. But it's really a love-hate relationship. Just realize that they really do not have your best interest in mind. Money dictates their moral conscience, not your well being.