You work hard for your money, and you should protect it. The last thing you want to deal with is an unethical company making you spend more than you should, or even worse, stealing from you. The best protection against scams or dealing with unethical businesses is learning where they are and how to avoid them. Every year, the National Association of Attorneys General (NAAG) releases a top 10 list of consumer complaints, which can be found here. The top 10 list includes :
- Debt Collection
- Auto Sales
- Home Repair/Construction
- Credit Cards (tie)
- Internet Goods and Services (tie)
- Predatory Lending/Mortgages
- Auto Repair
- Auto Warranties (tie)
- Telecom/Slamming/Cramming (tie)
Protect yourself from the top 3 consumer complaints
The top 3 consumer complaints are the same for the second year in a row, so let’s take a look at how we can avoid them. The best way to protect yourself against these scams is to be aware of how they work and educate yourself about the process. This is a case where an ounce of prevention is worth a pound of cure!
How to protect yourself from debt collectors.
In the game of debt collection, knowledge of the law is power. Unfortunately, some unethical debt collectors will prey on your ignorance of debt collection laws, often by harassment, false claims, and threats. Not all debt collectors fail to play by the rules, but if you come across one who does, you need to protect yourself. The first thing you need to do is know your rights. Read and understand the Fair Debt Collection Practices Act. Then use the law to protect yourself against unethical or illegal debt collection practices.
Protect yourself from debt collectors:
- Read and understand the Fair Debt Collection Practices Act.
- Record phone calls/communication.
- Send correspondence via registered mail or require a signature for delivery.
- Send a drop dead letter; by law, debt collectors not allowed to contact you once you inform them not to (though you will still owe the debt).
How to protect yourself from shady auto dealers
Customer complaints against auto dealers was number two on the list, and the most common complaint was in regard to used vehicles. Unfortunately, most states don’t have laws that require auto dealerships to reveal a vehicle’s history, even if they have the information. That means it may not be against the law for them to tell a lie regarding vehicle accident history, insurance claims, flood damage, etc. To top it off, in most cases used car sales are final and there is no recourse for the customer.
Protect yourself from shady auto dealers
Your best protection is to inspect the vehicle yourself, take it to an independent mechanic, run a CarFax report on the vehicle, and go beyond the CarFax report for more information about the vehicle’s condition. If the auto dealership won’t let you take the car to an independent mechanic to have it inspected before purchase, then you can take that as a sign to move on to a different dealership.
How to protect yourself from home repair fraud
The third most common consumer complaint was home repair and construction. There are many great contractors and home repair specialists out there, but there are just as many hacks and fraudsters.
One common scam is when “contractors” drive through neighborhoods and offer unsolicited bids on contracting jobs. They often quote prices well under the average market price and request a large deposit upfront for “material and expenses.” Once they take your check and several other checks in the neighborhood, they disappear and are gone for good. Other complaints center around contractors using inferior materials, delivering less than promised, finishing the project well behind schedule, cost overruns, and more.
Protect yourself from home repair fraud:
- Get a contract in writing with specifics regarding who, what, how much, timeline, materials, warranties, etc.
- Get recommendations from family, friends, and neighbors for trusted contractors.
- Ensure contractor is licensed, bonded, and insured.
The common factor in these customer complaints
Why do these three complaints lead the consumer complaint list two years running? Because they are difficult to police, difficult for the consumer to prove if a promise wasn’t in writing, and there is often very little that can be done after the fact. The most effective way to prevent falling for similar deceptive practices is to educate yourself about the what you are buying, or the process involved. Knowledge is power and protection.
More about consumer complaints
If you have a consumer complaint you should contact your state attorney general’s office or the Federal Trade Commission (FTC).