This may be a bit of a spin-off from that thread about receiving poor service, but I just thought it'd be interesting to hear our stories about the biggest rip-offs we have experienced or heard of.
For me, it has to be my car dealership. I won't name them (for now) but I think some people may be able to guess which one it is, as when I have told people my stories, they have had similar experiences.
So part of the contract when I purchased my car was that I'd have to take it back to them for servicing in order to keep the warranty (I later learnt that they could not legally enforce this, and the warranty didn't cover many things at all). It would always cost about $600-$1200 to service my car, mainly because they'd call me up and say "this is wrong/old/broken and needs to be repaired". I didn't know much back then, and I had a bit of trust in them as they were a major dealership, so I just went with it and paid.
I'll just go off on a bit of a tangent here when I say trust - because it was actually quite dumb of me to trust them after what had happened when I initially bought the car.
My dad went on a Thursday to look at some cars, and was told to come back on Saturday as there would be a sale on then. The salesman said he had a 2005 green Commodore which he could sell to my dad for $12,000 which had done 70,000km, but that price was only available on the day of the sale.
So on Saturday I go with my dad. We meet the same salesman, and we say we want to take a look at the green Commodore. He told us that it had been sold, and proceeded to show us other, more expensive, cars. When my dad said he was leaving, the salesman quickly said "ok ok, I'll show you the car" and took us to the green Commodore. I was like "wtf?!?! You just said you sold it". Although he told us it was $12,000, when we agreed to buy it, we were passed onto the next guy in the process who tried to sell it to us for $14,000, and wouldn't agree to talk to the first guy when we said the first guy said $12,000.
Anyway, I was more aware that something was up when one time I took my car there for servicing, and the guy called and said, amongst other things, that "all four tyres are ok, so they don't need changing". Funny, I thought, because at the previous service, I was told that two tyres were worn out and needed replacement, only that I told them I didn't want to do it at that stage.
So I did a bit of investigation on the net and through some acquaintances. Apparently they are well known for over-charging and doing scrappy work. Some people on the net have said they just make up things wrong with the car, or charge expert rates and get inexperienced apprentices to do the job. This is probably why there was a dent in my rear bumper one time when I got my car back from servicing. I complained, and they basically said I couldn't prove that they did it and that it wasn't already there before I took it for servicing (I wash my car every fortnight and so I know when new scratches/bumps appear). I argued with them and they offered to pay half the repair costs if I took it to them for repair, but I had decided they weren't going to touch my car ever again.
I also bumped into an old high school friend once, who told me he had bought a car there once. They told him they had done all this work during servicing, but when his mechanic friend looked at it, he said nothing had been touched at all. He went back to them to throw a fit and although they didn't admit it, they gave his money back.
I have also now found a garage that does my servicing for about $120.