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Little Mistakes, Big Consequences

© Jennifer Krausz

We've all made bad money choices at one time or another. The salesman talked you into that white leather couch even though you had three preschoolers. You called that infomercial and paid three easy monthly payments of $39.95 for the gadget that broke two months later, just after the warranty/satisfaction guarantee expired. Or you joined that pyramid scheme and found out that getting all your friends and relatives signed up was not going to be as easy as they made it sound.

I'm going to tell you about the most costly and stupid money mistake I've ever made, and then give you some tips for avoiding throwing your hard-earned money down the drain ever again.

Last November, I was listening to talk radio. The host was interviewing someone from the National Audit Defense Network, an organization that claimed it could drastically reduce people's income taxes as well as provide legal counsel if one were audited. At the end of the interview, a toll free number was given so that people could get more information about joining NADN, as well as a free audiocassette about ways to reduce your taxes.

Intrigued, I called the number strictly for the free information, hoping to find out whether the organization was worth joining and how much it cost. Onto the line came a slick salesman, telling me I would save at least $3000 and that even though my family's income was pretty low, I would definitely save enough to justify the $697 annual cost of the membership. Plus, there was a 30-day money back guarantee.

So I joined, putting the membership fee on my credit card. Immediately, I started having second thoughts. When I got the information and looked it over, I realized that my family would probably not save enough to pay for the membership. The deductions they wanted to find you mostly required starting home businesses and incorporating and hiring your kids to work for you. Not things we were considering doing.

So I called NADN to collect on the guarantee. Well after putting me off for a week, they finally called me, only to give me the hard sell again. I was probably just stressed over upcoming holiday bills, the salesman suggested. Then he offered me an upgrade to the 12 month guarantee. If they didn't save me $3000 in 12 months, then they'd refund me the money.

(Like a dope), I agreed. Then I got the actual guarantee in the mail. Instead of saving me $3000 as they promised, they only had to find me $3000 in new deductions. I was in the 15% tax bracket. $3000 in new deductions would only save me $450, not even enough to pay for the membership. So I contacted them again. This time I was told I could not get a refund until the 12 months passed. And then only if I made full use of their services and they couldn't find me the $3000 in deductions.