Paradigm Shifted

Ever forget to fill up the gas tank on the rental car before returning it? Ever miss a payment on bill or loan? Ever wonder what all those extra charges on your cell phone are?

If you answer yes to any of the above, chances are you’ve been swindled by a company looking to make a few extra bucks off your lack of vigilance. Commonly referred to as “gotcha capitalism”, the idea is simple – companies rely on you not to read the fine print, not to remember all the steps you need take to fulfil a contract, and not to question anything that sounds “official”.

Well, Bob Sullivan has written a book that we all need to read. It isn’t that we aren’t familiar with the concepts he discusses, it’s that we’re programmed to think that either a) we can’t do anything about it, or b) it’s our own fault for failing to pay attention.

Sullivan thinks otherwise, and his book Gotcha Capitalism: How Hidden Fees Rip You Off Every Day-and What You Can Do About It shows us how we can avoid the problem.

Some of the fees are minor and could be fixed easily with a little planning – ATM fees fall into this category. But some require more attention on our parts – mortgage contracts and cell phone bills come to mind.

You can get help on some of these – Patrick has an interview posted yesterday with a company that will help you with that cell phone bill. The business model looks great, and if they can diversify into power bills, they’ll definitely have my $5.

Sullivan offers a lot of tips in his book that are worth looking into and will save you money (it will definitely cover the cost of the book). Much of what he discusses is specific to industries or companies – things to look out for when refinancing, buying a car, canceling a cell phone contract.

He also offers some general advice, the most important of which is really simple: complain. Be polite, of course, but also insistent. Find out what the fees are, find out how to get reimbursed if they aren’t fair. Push as much as possible. Do not hesitate to point out what a great customer you’ve been, and how you’re willing to move on to a more agreeable company. Credit card companies will be the most responsive; grocery stores least responsive.

Your money is your business. Companies bank on your not willing to waste your time with arguing against a few bucks. But a few bucks adds up over time, particularly if we’re talking every month with several companies. Bleeding out a few bucks here and there will eventually derail your budget. So be proactive and stop up that outflow.