Money Ideas That Are Too Good to be True

As the economy worsens, many people are looking for ways to either make money or save money. Here is Black Voice's list of ideas that may seem tempting to try, but should be avoided. Save yourself -- and your money!

Government Grants Infomercials -- These late night infomercials mislead you into believing that grant money is easily available to almost everyone. The truth is that most of the millions in government grant money is given to local organizations and community development agencies who then distribute the money to individuals. There is a lot less grant money available for individuals and the requirements are very strict. But these organizations charge you hundreds of dollars for booklets that basically steer you back to the government agencies that you can access for free. The website grants.gov even warns about the infomercials!!!

Tax Refund Loans -- Also known as "refund anticipation loans" or "rapid refund," these products that have been offered by companies like H&R Block and Jackson Hewitt for years carry heavy fees that add up to outrageous interest rates of up to 200% on an annualized basis. With most e-filers receiving their refund check within 10 days, it makes sense to wait 10 days and get ALL of your refund instead of giving a good portion of it away.

Rent-A-Center -- Consumers strapped for cash often turn to this rent-to-own outfit for a quick fix for living problems. Unfortunately, you pay a penalty for quick access to items when you add up the costs over the long-haul. For example, renting a refrigerator for $17.99 for a month might be okay, but over a year? That amount might buy you two refrigerators. And rent-to-own customers have complained that if you miss a payment, they may come to repossess your items or restart your payments from the beginning -- eliminating any credit from past payments.

Payday Loans -- Payday lenders like Dollar Financial, EZCorp., Advance America and Cash America, which grant loans that need to be paid back by the next payday, have benefited recently as consumers have lost access to traditional credit. The Consumer Federation of America warns consumers to avoid these companies.They typically charge fees of as much as $30 per $100 borrowed, which burns consumers wallets at an average interest rate of 650% on an annualized basis.

Dr. Boyce Watkins Interview on Black Predatory Lending - BBC World News

Cash For Gold -- Television ads offering to pay you cash for gold jewelry will not give you the best deal for your items. Some of the ads even admit that fact. Consumer Reports suggest you use an online calculator to determine what your gold items might be worth and then take them to a reputable dealer who buys used gold jewelry.

Stock Trading Software -- Infomercials for stock-picking software like Wizetrade, Teach Me To Trade or InvesTools sell the dream of being able to outsmart the financial markets trading by stocks -- while charging you anywhere from $3,000 to $5,000. The recent market crash proves no software can guarantee what happens on Wall Street. Making money on Wall Street requires knowledge, not software. There are free resources that teach stock trading concepts online -- check out INO TV, for example. Use your time to educate yourself, rather than wasting money on a worthless financial "quick fix."

Gotcha Moments of Retail Shame

A regulatory organization for the advertising industry demanded that Wrigley change its misleading packaging and advertising for Eclipse gum. The ads for Eclipse say that the gum's natural ingredient - magnolia bark extract - kills germs that cause bad breath. This has not been proven and the National Advertising Division Council of Better Business Bureaus asks that Wrigley clarify this in its ads. For more on advertisers caught misleading consumers, click through our gallery of Gotcha Moments of Retail Shame.

Store:Chase Bank

Accusation: In late March, the bank rescinded a $10 monthly fee it had imposed for several months on hundreds of thousands of credit card accounts, after New York's attorney general decried the practice as a bait-and-switch for customers seeking low interest rates.

Results:The settlement could save customers $22 million over the next year.

Amy Sancetta, AP

Store: Burlington Coat Factory

Accusation: In March, a Connecticut TV station found inexpensive coats being sold as Perry Ellis and Joseph Abboud designs. The new labels had been pasted over the original label of the cheaper garments.

Result: Burlington blamed a vendor, which blamed a lone employee. The coats were pulled and refunds offered.

Burlington (Part 2)
Accusation: Selling coats made with dog fur. Burlington's coats came from China in 1998 and were labelled as "coyote fur." In 2006, Macy's was found to be selling Sean John jackets called "raccoon fur" but actually trimmed with "raccoon dog," which is indigenous to Asia. The Humane Society also found that items from Tommy Hilfiger, Andrew Marc, and Nordstrom.com were labeled as "faux fur" but actually came from dogs.
Result: Pulled the coats immediately, issued refunds, tried to track down who was tricking them.

Jeff Zelevansky, Bloomberg News / Landov

Store: Petland

Accusation: Does Petland use puppy mills? The Humane Society has filed suit in U.S. District Court against Petland, accusing the pet store chain of selling puppies raised in puppy mills that forced animals to live stacked in "filthy, barren cages reeking of urine, with inadequate care and socialization" and that they are raised "like a cash crop" and sold at stores for as much as $3,500.

Result: The plaintiffs want Petland to change how the puppies are bred and to pay back customers for the veterinary bills. In November, Petland said that stores are individually responsible for choosing healthy pets for sale.

Petland

Store: Circuit City and Linens n' Things

Accusation:
Fake discounts. When major retailers go out of business, they hire liquidators to clear their inventory. Liquidators hike the prices before discounting things, making deals looks better than they are. Circuit City's and Linens n' Things "going out of business" prices were often higher than the ones the stores charged before.

Result: Nothing. They're in bankruptcy, the liquidator can set prices wherever it wants, and so it's your problem.

Store: Best Buy

Accusation: Misinformation. Customers complained they were tricked into believing that an item was no longer on sale after store associates directed them to an in-store computer running the Best Buy website listing a higher price than was expected. What customers didn't know was the website wasn't public, but a store-only version that looked identical to the one you'd pull up at home -- except with higher prices.

Result: After the Connecticut Attorney General sued it and customers sounded off online, Best Buy slapped a disclaimer on the in-store site.

Gary Malerba, AP

Store: Office Depot

Accusation: Lying to money-saving customers. This month, customers who didn't splurge on high-yield add-on products such as a warranty complained that they were told the laptops they wanted to buy weren't in stock, even if they actually were. In-store sales quotas were blamed.

Result: Office Depot said it was "reviewing the situation."

Douglas C. Pizac, AP

Store: Dollar Tree, Greenbacks, 99 Cent Plus, Dollar Power, Dollar Super Store, 99 Cent Dreams

Accusation: In 2004, countless dollar stores were revealed to be selling Crest and Colgate toothpaste that appeared to be a standard U.S. product, but actually reportedly contained ten times the fluoride of drugstore toothpaste, making it poisonous if swallowed. It was reportedly made in Africa, where water supplies are not already fluoridated. In 2007, poisonous counterfeit Colgate from China was discovered at dollar stores in the Northeast.

Result: After F.D.A. recalls, the clone toothpastes were removed from shelves.

Michelle Patterson, Lexington Herald-Leader/ MCT

Store: Kmart, Ashley, and World Market

Accusation: Deceptive furniture labeling. In an on-camera investigation, Good Morning America busted Kmart for selling a Martha Stewart "dark cherry accent" table. A power sander revealed it was mostly fiberboard, which the attached descriptions didn't disclose. The morning show also exposed Ashley for selling a "horizon maple nightstand" that didn't contain any wood, and World Market for selling fake leather chairs.

Result: Kmart said full product descriptions were available online, Ashley defended its wording as a description of color only, and World Market acknowledged that a quarter of its supposedly leather chairs were actually synthetic, and it pulled them from sale.

AFP/Getty Images

Store: Wal-Mart

Accusation: Overcharging California customers by marking items at one price, but scanning them at a higher price at the register.

Result: After the California Attorney General's office filed suit, Wal-Mart settled, agreeing to give customers $3 back every time it happened, unless the item cost less than that, in which case it would be free.

Lisa Poole, AP

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