Don’t you get annoyed when you see something advertised as one thing, but then learn there is also a sneaky catch that changes the offer?
That’s what happened recently to Mark D. He told us about a TV commercial he had seen from Sleep Number — the adjustable bed company — offering zero-percent financing on certain mattresses.
The fine print that is very easy to miss has a surprise for purchasers who were expecting to pay no finance charges.
*MOUSE PRINT:
The company added a sneaky two-percent junk fee onto each monthly payment.
Certainly sneaky for sure.
Doesn’t this violate any laws?
Not when corporate interests are the ones writing the laws.
From Dictionary.com, definition 14 for interest is “a sum paid or charged for the use of money or for borrowing money.” Doesn’t matter what they call it, by definition it’s still interest.
Be careful of deals that say no interest until 20XX. What they mean is as long as you make regular monthly payments there will be no interest, but if you miss ONE monthly payment then you are stuck for interest going back to day one of the loan.
I hadn’t heard that one, but not surprised, they’ll stop at nothing for more $s. I have heard that if it’s not paid off by the time they give you, you’ll pay interest on the whole loan, not just the remaining amount. And the date for that might be before the last payment is due. Which is super sneaky!!
This reminds me of the common practice in auto sales of offering “0% financing” or a big cash rebate at time of purchase. If you have to pay a big upfront fee (the loss of a rebate) then that’s not zero percent APR, because you’ve effectively paid points on the loan.
good point!
This sounds like bait-and-switch fraud. They lure you in then switch the expected deal for another.
I read the fine print as the 2% fee is tacked onto the total balance, not each individual payment. So you are paying it as a small added fee as part of the principle payments.
Still doesn’t seem right.
It would be interesting to see the loan agreement and how it justifies the fee.
Money is never free
This has to be illegal.
I would caution all to be weary about these types of deals anyway. This one is obviously very bad and very sketchy at best, but these mattress store deals are almost always bad. A few things to note:
Normally your “24 months interest free payments” won’t mean paying off the loan in 24 months, you’ll have to pay more than the minimum to get it paid off in 24 months.
In most deals I’ve seen like this, the moment you make a late payment, interest kicks in for the full cost of the loan.
Ballooning is the worst though. During your “no interest” period, they’re secretly stacking up a pile of interest in the background. The moment you own any balance on at the loan in month 25, they’ll going to add all of the interest from the entire “interest free” period onto the balance of the loan.
And, at the end of the day, these deals always end up costing more. Most of the time there’s something like, “We’ll pay your sales tax or you’ll get no interest financing.” meaning you end up paying more for the item for the privilege of financing it. Do yourself and your checkbook a favor, pay cash.
Wow, that’s ballsy and disgusting
Irrespective of that usurious 2%, no one mentioned that their financing deal has to be done with a Sleep Number credit card, and only applies to certain beds. That means the applicant has to go through their credit application process, which usually means a hard credit check, and a likely ding on their credit. And that’s all assuming you’re approved for their Sleep Number card.
Credit check is normal and happens with every loan and financing application, no matter of 0 or 2 or 10%, no matter if honest or sneaky financing terms.