5 misleading ads that can wipe out your wallet

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5 misleading ads that can wipe out your wallet
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The motto of my show is ‘save more, spend less, and avoid ripoffs.’ But what if you can’t recognize those ripoffs when you’re faced with alluring advertising pitches? Here are 5 kinds of misleading ads to watch out for.

Pay your home off in half the time!

You can pay your mortgage off early with ease – sounds great right? If you do it the right way. It’s not that you can’t pay your mortgage off early…it’s that there’s a right way and a wrong way to go about it.

Those offers that come in the mail promising to get you set up on a bi-weekly payment plan are ripoffs, not out-and-out scams. 

Banks team up with appointed marketing companies to send out these solicitations and to collect bi-weekly mortgage payments. But they’ll charge $200-$400 to set you up on this kind of payment plan. The marketing company may also charge a few dollars each time you make a bi-weekly payment, which is half of your monthly payment every 2 weeks. 

It’s true that a bi-weekly payment plan for your mortgage could save you $10,000, $20,000 or even $30,000 over the life of your loan. But you don’t have to pay anyone to set up this plan for you; here’s a very simple way to do it on your own.

Drive out in a new car TODAY! No credit, no problem!

We’ve all seen this pitch on TV and screaming out to us as we pass the the ‘buy here, pay here’ lots. But the reality is that what seems like a solution to your need for wheels is a big problem. The financing you get as a sub-prime borrower usually comes with extremely high interest rates. 

When you go to buy a car, I recommend that you separate the process into parts: 

First, get pre-qualified for financing at a credit union, online lender or traditional bank. Only use the dealer for financing if they will give you the lowest rate.  Most importantly, really think about how much you truly want to spend on the car, not the monthly payment. Too many Americans are ‘all flash, no cash’ and drive their money down the drain. Cars lose value over time, so they are never an ‘investment.’ Think of what you can do saving for your future with that extra money in your pocket. 

Second, shop around for the car before you get to the dealership. You can get a guaranteed price for a vehicle online and never have to set foot in a dealership other than to take delivery of the vehicle.

Finally, before you buy, please check out my used car buying guide and my new car buying guide.

GUARANTEED 10% return on your money!

Wouldn’t you like to believe there’s an easy way to create wealth? That there’s one simple answer that will create financial freedom in your life? The reality is the road to El Dorado is a ‘get rich slow’ zone and a pretty boring drive at that, as I discuss in my investing guide

When you’re hearing investment pitches, be particularly wary of ‘investments’ (and I use that term loosely) that are supposedly ‘fully guaranteed.’ There is no such guarantee in the investing world. Investing by its very nature entails risk.

Also beware when somebody promises these supposedly great returns on your money because they’re the ones who have figured out a secret way to do it.

Ask yourself this: If they’re really making those great returns they promise, why do they need me? They should have more than enough money on their own. The answer is that they don’t need you, it’s just a ruse.

You have just won 2 free tickets to anywhere in the world!

This pitch typically comes either by phone call, e-mail or even postcard. You’re told you’ve won a prize, usually a vacation like a cruise, an air flight or perhaps a resort stay. Before you start packing your bathing suit and snorkel, let’s take a closer look. 

Normally, you have to call in to ‘claim’ your ‘prize.’ That’s when you’re asked to make an appointment to hear a sales pitch for a vacation club or travel club before you get your ‘prize.’

Once you hear the pitch, they’ll typically try to get $5,000 or $6,000 from you, stringing you along all the while with the promise of more free travel and cruises.

But let me stop and ask you something: If you’re told you won something, you should just say ‘thank you’ and that’s it, right? You should not have to pay upfront for anything. Anytime you’re told you will have to go in to hear a presentation, you should know that it’s suspect. The high pressure will start and they’ll try to get you into a high-priced contract for a timeshare or the like.

Make 6 figures working from home for 2 hours a day!

As social networking gains in popularity, so too does the prevalence of scamsters pushing supposedly amazing work-at-home opportunities. 

I once read about a company called Easy Tweet Profits that claimed you can make up to $873/day online. They even claimed one person earned $400,000/year using their method of tweeting your way to success. The catch? By signing up for their program you agree to be charged $40/month! 

There are a whole host of other companies with similar names (usually involving ‘make money’ or ‘make profits’) that suggest social networking can be a cash cow. But their game is all the same. 

Whether you’re talking about something you see on Facebook, Instagram, Twitter or whatever’s the next hot thing is, you’ve got to be wary.

For the real deal on legit work-at-home opportunities, see my list.

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Clark Howard About the author:
Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. More about Clark
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