Even if you think of yourself as a savvy consumer, it’s likely that you’ve felt cheated from time to time by a product or service that fails to live up to its claims.

Every year, the annual survey of state and local consumer protection agencies conducted by the Consumer Federation of America and the North American Consumer Protection Investigators finds that the prevalence of consumer rip-offs has reached epidemic proportions.

You can fight back by staying informed. Here’s a list of six worthless offerings that confront consumers every day. They’re among the most common — and insidious — rip-offs around.

1. Credit insurance.

This type of insurance is such a waste of money, it borders on outright fraud. Here’s how it works: When you obtain a new loan or credit card, the lender will attempt to sell you credit insurance, promising that should anything bad happen to you, such as unemployment, illness or death, the insurance company will pay off the remainder of your debt.

Some lenders aggressively push this type of insurance, using the fear of passing mountains of debt along to your loved ones as a selling tactic. Don’t fall for it. The statistical odds of something adverse happening don’t justify the expense. The protection tends to be costly and riddled with loopholes that allow the insurer to wriggle off the hook. File this financial product under “bad deal.”

2. Debt management plans.

These scams are all the rage on late-night television. The ad usually starts with a montage of average people, tormented by too much debt. A distinguished-looking fellow in a suit suddenly appears and in resonant tones, promises to slash your debt by dramatic amounts. All you need to do is call the 1-800 number on your screen and salvation from debt is yours.

Here’s the reality: Debt management companies solely exist to pick your pocket. They charge sky-high fees and don’t eliminate your debt; they repackage and consolidate it. At the end of the day, you still have the same debt—but now, on top of your debt, you’ve just spent a large fee to a company that merely played paper games with it.

The same applies to companies that promise to help you escape your 
responsibilities from the IRS. Slash your overdue taxes by huge percentages, simply by calling that 1-800 number? It can’t be done.

3. Paying for credit reports.

Some companies will use scare tactics to stoke anxiety about your credit rating, and then announce that by giving them a fee, they’ll provide you with your all-important credit report.

Problem is, you can go online and find a multitude of companies that will provide the same service — for free.

4. Special credit cards.

When choosing a credit card, always look for the lowest possible interest rate. If you shop around, you can find a credit card with an interest rate in the single digits. That’s why you should be particularly wary of credit cards that offer sexy deals but which invariably come with very high interest rates of 18% or higher.

Some cards even charge interest as high as 30%, a usurious rate more associated with Mafia leg breakers than banks.

Notable in this category are airline frequent flier cards or department store cards, which tend to incur high annual fees and exorbitant interest rates. If an airline credit card promises, say, 25,000 frequent flier miles as an incentive to sign on, it’s still not worth the extra interest you’re likely to pay every year.

5. Extended warranties for consumer electronics.

A casual walk through any Big Box retailer will tell you the obvious: Consumer electronics are undergoing commodification and deflation, as manufacturers shift facilities to dirt-cheap locations and ferociously compete on price. Consumers are accustomed to inexpensive smartphones, stereos, and television sets, and they’ll push back if prices go higher.

Hence the manufacturers’ dilemma: How can they boost razor-thin margins? By selling expensive extended warranties, of course.

For example, don’t fall for your smartphone company’s marketing about the horrors of a lost or broken phone. The premiums for insuring your phone tend to be ridiculously expensive (as much as $200 a year, with deductibles just as high) and besides, your homeowner’s insurance probably already covers it.

This same principle applies to extended warranties for all types of electronic products. Don’t forget, most products come with a manufacturer’s 12-month warranty. So, the next time a cashier twists your arm to buy an extended warranty, just say: “No thanks.”

6. Excessive auto insurance.

Read the fine print of your auto policy. You’ll probably find lots of areas where you’re getting soaked. Here are three quick places to check:

a) If you’re driving an old car that’s worth less than $5,000, eliminate comprehensive and collision coverage. The car already has a low “Blue Book” value. Why pay a lot when you can replace it for only a little?

b) As with homeowner’s insurance, consider increasing your deductibles to lower your monthly premium payments.

c) If you’re driving a newer car, get rid of unnecessary coverage such as towing—the chances of a new car breaking down aren’t high enough to justify it. These superfluous items often are tacked onto a policy without you even knowing it.

Got any personal stories about bad consumer deals that affected you? I’d like to share your experience in a future article, as a warning to readers. Drop me a line at: mailbag@investingdaily.com.

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John Persinos is the editorial director of Investing Daily.

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