The Bait and Switch

This is a classic scam. A product will be advertised at a price below cost in order to "bait" the customer into a store. When the customer comes into the store to buy the item, the retailer claims it’s either out of stock or a bad product. The retailer, who never indented to sell the advertised product or only a limited number of items, will then attempt to persuade the customer to purchase a more expensive item.

Rebate Advertisement

Some businesses will advertise the sale price of an item without disclosing that this price can only be obtained after the consumer pays a higher in-store price and then mails in a rebate. These rebates can take weeks and sometimes months to get to the consumer. Yet, since the price advertised can ultimately be obtained by the consumer, the advertisement is not false, but it is misleading. That’s why New York State has a law requiring retailers advertising a rebate sale item to disclose that the lower advertised price can only be obtained by using a mail-in rebate.

Checks by Mail

Banks and finance companies often mail simulated checks seemingly worth thousands of dollars to consumers with good credit. An accompanying letter touts low monthly payments and suggest how the money can be used to buy the luxury items that you’ve earned. Only the fine print details annual interest rates as high as 21% and long-term payments. The check is, in fact, a consumer loan — at rates two and three times higher than conventional loans. Don’t be fooled by the packaging. And always read the small print carefully.

Winning Contests You Never Entered

The next time you receive an unsolicited letter awarding you an expensive gift ask yourself this: when is the last time anyone won a prize for a contest they did not enter? The truth is, these prizes are usually used to promote products like real estate or vacation time-shares. You’ll find the diamond you won is the size of a pinhead or the food processor is a cheap, hand-operated food chopper. You may be asked to attend a sales meeting to pick up your gift or send a shipping and handling fee. Be skeptical of unsolicited mail that is marked urgent or resembles telegrams. And, never give your credit card number, social security number or bank account number to show eligibility or confirm an award. In short, avoid any prize that costs you time or money.

800- Numbers

Most 800-numbers are toll-free, but increasingly consumers are being illegally charged for these calls on their telephone bills. If you use an 800-number that has a fee, the service must either ask you to pay with a credit card or make billing arrangements over the telephone. They also must provide security protection devices — like a personal identification number (PIN) — to prevent unauthorized access to the service. An advertised 800-number service can not automatically transfer your call to a pay-per-call 900-number, make collect calls back to you, charge you for information without your permission, or bill you at an expensive international long-distance rate. Be suspicious of 800-number information services that advertise on late-night television, cable, classified and personal ads, or have international prefixes like "011" or "809". These services may include adult talk lines, dating horoscope, or psychic readings.