The "No Interest, No
Payments" Scam
When you think of scams, you think of
criminals in hiding inventing ways to trick people out of
their money. But what about the legal scams that are
perpetrated against consumers by corporate America?
Here is another corporate scam that is very
deceptive and leaves many consumers buried in debt from
unexpected interest charges.
"No Interest, No Payments Until 2007!!!" It
sounds like you don't have to start making payments until
2007. It also sounds like interest will not begin to accrue
until 2007.
But that's not how the scam works.
The consumer is expected to start making payments right away
and the debt has to be paid in full before 2007 (this
is hidden in the fine print). Otherwise, the consumer is
forced to pay a mountain of unexpected interest charges.
Let's say that in 2005, you purchase a large
screen TV for $1999. You finance it on a "no interest, no
payments" until 2007" plan. One of two things can
happen:
1) You expect to start paying for the TV in
2007. When 2007 arrives, you find out that you have to
pay back interest from 2005 and 2006 (in addition
to the interest and principal for 2007).
2) You start making payments in 2005. When
2007 arrives, you have paid $1800 on the TV. You should
only owe $199, but that's not how the scam
works. You will also be charged back interest on
the full amount for 2005 and 2006.
To make matters worse, the interest rate
charged in these scams can be as high as 45%!!
Beware of the "No Interest, No Payments" scam.
Also, look out for these other legalized corporate
scams:
