6 Insidious Ways You’re Getting Ripped Off, and How to Fight Back
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In the wake of the financial crisis, there was a moment of hope that predatory businesses would no longer be able to pick at our bones like vultures. Instead, we've seen Dodd-Frank weakened and stalled, and the newly created Consumer Financial Protection Bureau stymied at every turn. In the latest round, Republicans are thwarting the confirmation of Richard Cordray to lead the Bureau. Meanwhile, we continue to get fleeced. Here are a few egregious scams to watch out for, along with ways to protect yourself.
1. Auto-renewal scams
The rip-off: You sign up for a product or service for a limited time period. Then, long after that time has passed, you notice mysterious charges appearing on your credit card bill. Very likely, you have been the victim of the auto-renewal/automatic billing scam. Somewhere in the fine print of the terms you agreed to was a note saying that your credit card would be charged whether you decided to continue or not. But of course, you didn’t see it, because the company didn’t want you to. This is a blatant scam, and a very common one, generating big bucks for many well-known companies, including Match.com, XM Satellite Radio and DirecTV. Time Warner has come under fire for screwing customers on magazine subscriptions, and GoDaddy, the domain registrar, is another notorious offender.
The remedy: With a little knowledge and persistence, you can fight back. In some states, like New York, it is totally illegal for a company to do auto-renewing on your credit card without notifying you in advance in writing. Find out what the law is in your state, then call the company and ask to speak to a supervisor. If the supervisor pretends that the law doesn’t apply (which they probably will) and refuses to refund you, then ask to be connected to the corporate or legal departments. Tell them that if you don’t get resolution, you will be filing a complaint with the Better Business Bureau (which will contact the company) and also with your state attorney general’s office. Often the company will change its tune and refund your money. The law is not on their side: The giant company Bloomberg, provider of financial data was successfully sued for pulling this fast one.
2. The out-of-network doctor trap
The rip-off: You need medical treatment. You dutifully check the listings from your insurance provider to choose an in-network doctor or hospital. After your treatment, you receive a surprise in your mailbox—a giant bill, perhaps for many thousands, or even tens of thousands of dollars. Why? A person involved in your treatment, unbeknownst to you, is considered out-of-network. This is the out-of-network doctor trap, a.k.a. the surprise billing scam.
This can happen in a doctor’s office for a simple scheduled procedure or in a hospital for an emergency. Sometimes it’s the assistant surgeon. Others times it’s the radiologist, pathologist or anethesiologist. In a practice called “balance billing,” you get billed the difference between what your insurance chooses to reimburse and what the provider chooses to charge. You may think that your insurer is supposed to reimburse you for 70 percent of out-of-network costs, but that really means only 70 percent of what the insurer determines is "usual, customary and reasonable.” And what does reasonable mean? Whatever the insurer says it means, which is often far less than what the out-of-network doctor decides to charge. Insurers often manipulate claims and data just to screw you: In 2009, UnitedHealth had to pay a big settlement for this type of fraud when then-New York Attorney General Andrew Cuomo investigated and sued. But fines don’t stop these big insurers – the money they make from scamming is too good.