We Canadians

Most of us can outsmart  Internet scammers who are always on the prowl for victims. But few can avoid the consumer rip-offs that affect our everyday lives, making us spend hundreds more  than we have to on  utilities, goods and services offered by seemingly reputed companies.  In fact,sometimes we dont even realize that we are being paid to more. Here are the top ten examples:

Rip-off 1: Residential electricity charges

Just take a  look at your hydro bill; if you are paying much more than the market rate for electricity you are being ripped off. In Ontario, the rate is 5.5 to 6.5cents/kwh with a peak rate of 8.8 cents/kwh, plus some fixed monthly charges. Just see the website below:

http://www.ontario-hydro.com/index.php?page=current_rates

 If you are paying more, you probably signed a contract with an energy reseller. Since de-regulation, these resellers have mushroomed every where. They visit homes, and get people to sign long-term contract at ‘guaranteed’ prices. This only guarantees the resellers a profit. Just think - why would these people take the time to visit you unless they could turn a profit?

Rip-off 2: Domestic gas prices

Again, check your domestic gas bill. If you are paying much more than the market price for domestic gas, you are being scammed. Currently, in Ontario, the best market rate is around 27 cents per  cubic meter,  for a one year contract. In many  cases, customers are being charged upto 45 cents per unit.

Do a little research and check out the best prices; one useful Internet site is:

http://www.energyshop.com/natural-gas-prices-Enbridge-residential.cfm

Sometimes, you may get offers in the mail for a new contract or a renewal. Never sign these contracts without checking out the market rates first.

Rip-off 3: Rental water heaters

Water heater rental costs only twelve or thirteen dollars a month but over a 15-year life span, you could end up paying two or three times the cost of the heater.

This rip off  is a little hard to spot; the rental is often disguised as a service charge on the utility bill. You have to dig deep into the second or third page to find the word ‘rental’. The utilities have  good reasons to hide this piece of information; if you dont rent any other piece of mechanical equipment,why should you rent a water heater?

In some cases, it is best to rent the heater for the first year and then buy it; this way, the utility pays for the depreciation and you are sure there are no installation problems that often surface within the first year.

Rip-off 4: Long-distance calling plans

There are so many long distance plans, with so many variations, that the customer is always confused. If you have stayed with any one provider for more than a year, the chances are that you are paying  more than you have to. One strategy is to  keep switching suppliers. Yet another  strategy may be to use calling cards. Since these are sold in the open market they are generally competitively priced.

Rip-off 5: Cell phone deals

Again, there are so many deals, with so many variations, that it is hard to choose one. I was ripped-off for years with a cell-phone plan with fixed monthly charges and a few hundred free minutes every month. As a result, I spent hundreds of dollars over the years for services that I never fully used.

For moderate cell phone users, it may be best to go for a service without  no monthly charge and with pre-paid cards that last a t least a year.

Rip-off 6: Bank charges

Banks legitimately charge money when you borrow money; however most of them charge you for keeping your money with them. There are monthly service charges on many accounts and you may have shell out  money for cheque-books. Find a bank that does not charge for these services; there are a few ‘no frills’ banks that do this. Banks also charge you for inter-bank transactions and for changing money; shop around for the best deals before spending.

For most of us, mortgage payments are a big part of our lives and banks make insane amounts of money out of this. For years, I took out fixed-rate mortgages because of the ’stability’ factor; as a result  our mortgage balance hardly declined. Most of the money went towards paying interest.

The moment I switched to variable-rate mortgage, the balance started reducing.  Over the long run, variable rate mortgages work out better for most people. To cover risks of  rising interest rates, consider a variable-rate mortgage with a cap on the maximum interest rate.

Rip-off 7:Bundled services

Many communications providers like to bundle services and offer a discount for doing so. All it does, really, is prevent competitive shopping for each item in the bundle.

Why not simply unbundle the services, and look for the best deal for each item? In most cases, you can save a bundle. And if you dont use the internet very frequently, consider using the public library where you pay zero dollars  for this service.

Rip-off 8:Fitness centre contracts

Many fitness centres want you to sign a contract for at least one year. This is a waste  for most of us, because who needs a gym during the summer months?Why not just go outdoors and get your exercise?

Go to the nearest community centre for a short-term contract. Use these services only during the winter months and you save a bundle.

Rip-off 9: Enriched white bread

This is just one example of how  the food processing industry rips-off people. The company takes perfectly wholesome wheat, pulverizes it and takes all the good stuff out, leaving only a white residue. Since this is totally devoid of nutrients, a few vitamins and such are added along with a hefty dose of  preservatives. This chemical mix is then baked and sold as ‘enriched white bread’.

Almost the same thing is done to most of the other processed foods you see in the grocery store. Sometimes it is sold at a higher price as ‘organic food’ but that is another rip-off, altogether.

Ripoff 10: Bottled water

This must surely  ranked as the ’scam of all scams’. Companies sell bottled water at well over  500 times the price of tap water. It is a more expensive fluid than gasoline once it is bottled up and suitably labelled.

Numerous studies have shown that bottled water is in no way superior to municipal drinking, which is equally safe to drink . Municipal water has to meet all kind of safety standards and in most parts of North America, it is perfectly fit for drinking.

A recent TV documentary showed how, in some cases, bottled water was nothing but municipal water run through some kind of bottling process.

Of course, this rip-off gets  worse in luxury hotels that may charge  ten times more for the same product. So you end up paying a few thousand times more than tap water for essentially the same product.