Today’s marketing is out of control.  Don’t get me wrong, there are the real good, responsible marketing programs representing good products and services.  There are also programs that I term “irresponsible marketing.”

Irresponsible marketing programs imply something that is just not true.  The problem is that most consumers don’t take the time to look at the details. There is a part of all of us that wants to believe the sensational irresponsible marketing is true.  Let’s look at some details.

1) The free book or CD offer that will change your life!

“I am going to make you a millionaire.”

“I am going to show you how to make millions flipping real estate.”

“I am going to show you my stock picking system that will make you rich.”

I could go on and on with the marketing pitches.  Basically, these commercials are going to show you how the information being marketed is going to change your life.  This life changing information is going to be given to you for “free.”  “There is no cost to you,” says the commercial…“with the exception of a ‘small’ shipping and handling fee of $9.95.”

Since when does it cost $9.95 to ship a CD or small book?  It doesn’t.  They are basically selling you a book or CD for $9.95.  These commercials are designed to sell product disguised as a free offer.  Bottom line: Don’t do business with anyone who sinks to these levels to “sell” you something.

2) www.freecreditreport.com

Just go online and within seconds you will receive your free credit reports and scores.  It is that easy.  Well, it is that easy as long as you sign up for their credit monitoring service that you will need to cancel within 30 days to keep this offer free.  Experian, one of the three credit reporting agencies, really crossed the line with this deceptive marketing campaign.  Unfortunately, consumers confuse this site with the real free credit report that consumers can get one time a year at www.annualcreditreport.com.

3) $ 1,000,000 guarantee protection against identity theft

I have written many times about my concerns about the irresponsible marketing of LifeLock.  Apparently, Experian and an attorney in New Jersey agree with these claims as both are filing lawsuits against this company for deceptive marketing.

LifeLock is the company whose CEO, Todd Davis, tells you his Social Security number and dares you to steal his ID.  Of course, someone has stolen Mr. Davis’ identity and his service failed to prevent it.  All they are doing is putting fraud alerts on your credit reports, which is something that you can do yourself.

One of the bases of Experian’s lawsuit is that the intention of the law was never to allow consumers to just randomly put fraud alerts on credit reports.  You have to be a victim or suspect you are a victim of fraud.  Then there is the 1 million dollar guarantee.  They will fix the problem if LifeLock doesn’t work.  First, they will only pay for assistance in getting it fixed (which is something else you can do for yourself).  Second, the costs in fixing an identity theft problem are minimal.  The main costs that are not covered are the actual loss of money and time incurred in an identity theft situation, which are not covered.

Then my favorite claim is that they are the only service that offers identity theft protection for children.  They are the only service that does so because the probability of a child identity theft is so small due to the fact CHILDREN DON’T HAVE CREDIT REPORTS.  No big surprise that they are the only service offering this type of protection.

4) “We will lower your monthly payment on the servicing of your debt.”

Wells Fargo, who I wrote about a few weeks ago, has been calling customers offering to refinance debt and lower payments.  I am starting to get many emails about these types of offers.  They do lower your payments.  However, this great deal that they are proposing ends up costing you so much more in interest over the life of the debt.  It is not a good deal at all for someone who is working very hard to get out of debt.

For example, I had a listener email me about an offer to lower her monthly payment and interest rate on a new loan.  However, the proposed loan takes the payments out an additional 12 months.  If she went that route, she would pay an additional $544.94 in interest which is roughly an additional 5% cost of the original debt.

Now if they lowered her interest rate and encouraged her to continue making the higher debt payment, then that would be a good strategy.  As you can guess, that wasn’t the pitch.

5) Citi Simplicity     “No more late fees!”

This is far and beyond my favorite irresponsible marketing program.  The marketing hook is that they waive late fees.  If you are late, Citibank waives the fees.  This is an ingenious marketing hook. Let’s think about this for a second.  Who would be interested in this credit card?  The most interested would be the consumer who is prone to being late with a payment.

Who is Citibank’s best customer?  Their most profitable customers are those that carry a balance with high interest rates.  How do most consumers end up with higher interest rates?  They are late with a payment.  Who is Citibank trying to lure?  The consumer who has had trouble with making payments on time and that hates the fees that go along with being late.

So, someone who is prone to being late signs up for this card.  The consumer thinks that this is a good deal because they will have no more late fees.

Picture this scenario with me.  One day, the Citibank consumer is rushing to work.  The consumer realizes that their latest credit card statement is still sitting on the kitchen table and has not been mailed.  “No worries”, says the consumer. “I can be late because there will be no late fees.  I have the new CitiSimplicity card.”

What a great deal for the consumer.  If they are late, there are no fees.  However, there is a much worse result than a $39 late fee.  If you are late by one day, they can raise your rate up to 30%.  The good news is that the $39 late fee is waived.  The bad news is that lower interest rate was just raised to 30%.  Gotcha!!!

Here is a look at the fine print behind the marketing:

• Late fee waived as long as purchase/cash advance is made during the same billing period that the payment is due.
• For good credit, the APR is 12.49% (once again, at the time of this writing, you could get a credit card with much lower interest rates).
• They encourage you to transfer those balances over at 0%.  What a great deal.  The credit card company has now increased the odds of being able to charge even higher interest rates on all of that debt that you just transferred over.  If you are then late, your balance transfer could go from 0 to 30% in a matter of seconds.
• For the most part, they have a Universal Default Clause.  Citibank claims that they no longer have that clause because they notify the customer ahead of time that they are going to increase the rate, giving them the option to opt-out.  Although that it is mighty generous of them, the customer probably does not have the money to pay the debt off.  The customer would have to close the account and they would be stuck with the high interest rate regardless of Citibank’s generosity.
• Of course, my favorite line – “Rates, fees, and terms may change at any time for any reason”.

Citibank slogan – “We get that you want a credit card that treats you right.”  I really cannot make this stuff up.