There are plenty of companies and services who want your money. That’s fine. It’s how capitalism works. But there is another kind of company who wants your money, and wants to make sure it gets it, even if you don’t want them to have it. Companies like this work on the edge of the law (and ethical behavior) to see to it that they get more of your money than they are (probably) entitled to. These are sneaky tactics, so you’ve got to make sure you’re aware of them. If you know what to look for, you can make sure these payments get eliminated, or that they never latch onto your bank account in the first place.
Payment Protection Insurance
One of the biggest ways that this happens is with service payments that get attached to contracts and financial agreements. One of the most practical examples is PPI, a form in loan repayment insurance that would cover payments if a consumer ever fell ill or lost a job, rendering them unable to pay back a loan. It’s a valid service, one that helps many people who would otherwise be vulnerable to default. But what isn’t valid is the way that PPI found it’s way into the lives of many of the people who have it. In England, thousands of loans get issued by banks every day. For many years, many of these loans had some fine print which automatically signed people up for PPI. Sure, people were signing on the dotted line, and they were technically responsible for signing up, even if they didn’t really read the material. But courts have found that this was in breach of contract law, and class actions lawsuits are seeing to it that people are paid back for the monthly payments that may have been drafting out of their accounts for years. If you have PPI, use this PPI calculator to see how much money you might get back.
Another way that people get tied up with sneaky money is through loans issued with unclear or predatory terms. There are dozens of companies which make loan terms intentionally difficult to understand. You’ll know you’re dealing with such a company if you find they have variable interest rates which change suddenly, or if they don’t accept early repayment. There is no reason why lending terms should not be clear. Companies like Prosper loans are an example of the kind of company that does it right. Take a look at the way they organize their terms to start to understand what you should look for in an excellent lender, to avoid surprise payments.
One last example of sneaky money is subscription services that continue in perpetuity. The ethical way for subscriptions to operate it to ask if you want to renew every six months or a year. But some automatically renew indefinitely, meaning that if you forget about the subscription, you’ve got a drain on your checking account for as long as it remains open. In all of these examples, it’s important to check your financial accounts every now and then, to make sure that you’re only making payments which you want and are aware of.
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