Nearly bald? Covering it with mud is ineffective cure (5-3)

I believe the answer is:

snake-oil

I'm a little stuck... Click here to teach me more about this clue!

'it with mud is ineffective cure' is the definition.
I know nothing about this answer so I cannot tell whether it can be defined by this definition.

'nearly bald? covering' is the wordplay.
'nearly bald?' becomes 'snake' (I am not sure about this - if you are sure you should believe this answer much more).
'covering' becomes 'oil' (oil is a kind of covering).
'snake'+'oil'='SNAKE-OIL'

Can you help me to learn more?

I've seen this clue in The Independent.

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