Ways You're Getting Ripped Off

Entrepreneurs
Ways You're Getting Ripped Off
You know you're paying too much. We show you just
In Pictures: 14 Ways You're Getting Ripped Off
Economists call them "market inefficiencies"--those thrilling or frustrating moments (depending on your point of view) when the price of something veers from its underlying, inherent value. In the stock market, those discrepancies may last a few seconds, as arbitrageurs jump into the breach. In the land of goods and services bought by real consumers, the misalignments may persist for years.
In that world--the one in which we all live, eat, shop, drive and pay bills--they're called rip-offs. We're not talking fraud here (though there's plenty of that going around, too). We're talking about all the ways, within the law, that humans allow themselves to be taken for a ride.
t's our collective fault, of course. If we weren't so naive, distracted, short-sighted, stressed out and downright lazy (see: 15 Ways Your Laziness Is Costing You Money), we wouldn't fall prey to all this flimflam.
In Pictures: 14 Ways You're Getting Ripped Off
In Pictures: 11 Ways To Sniff Out A Liar
Worse, we know we're being taken. On some level, we're resigned--even inured--to it. And so we continue to torch dollars on overpriced stuff when better, if slightly less convenient, substitutes abound.
The list of rip-offs is longer than Tiger Woods off the tee. We unearthed but a few, and will go back for more over the coming months. Some may be familiar, though you may not know just how egregious they are. (Indeed, the numbers may really steam you.)
Some highlights thus far:
Life Insurance Settlements
The Rip-off: Life settlements, a $15 billion market in the U.S., occur when a life insurance policy holder sells his or her existing policy for an immediate lump-sum cash payment to cover a divorce, an expensive operation or any other sizable obligation. Life-settlement brokers find buyers for these policies, usually financial institutions.
Here's the rub: The broker's commission is based on the face value of the policy, not on the price he ultimately snags for his client. That setup eliminates any incentive to maximize value for policy sellers, who may end up leaving as much as 30% on the table.
How To Avoid It: Remove the middle man. Amrita Financial, in Oceanside, Calif., lets sellers post their policies anonymously online, to get a sense of what buyers are willing to bid. A policy appraisal takes less than a minute to obtain--just type in your age, gender, health status, policy type and annual premiums.