Tuesday Tips: Avoiding Scams
Merriam-Webster defines a scam as "a fraudulent or deceptive act or operation." It's a strong word and no business owner out there wants it associated with their company. Most of all, no consumer wants to be a victim of one. How do you define a scam? How often have you been a victim? I can't say that I've ever been officially scammed. I've certainly been unhappy with a purchase and with some rational calmness I've been able to get my money back. Other times I just chalked it up as a life lesson learned. But one of these days I might not be so lucky. Here are some tips for avoiding a scam and what to do if one crosses your path:
Tip #1: Before you do business with any company, do your due diligence. Ask for references, check out the company with your local Better Business Bureau, ask friends and family if they've ever done business with them. Even putting their name in a Google search may give you some clues. If you find complaints, think twice about giving the company your business. The Better Business Bureau that serves Washington, D.C., and eastern Pennsylvania handled 60,000 complaints in 2007, up 50 percent from the last couple of years. "People get click happy and they don't pause before entering into a transaction," says Edward Johnson, president and chief executive of the local BBB. "We can't encourage people enough to use their mouse for research first."
Tip #3: Don't do business with a company whose name can be easily confused with a government agency or a well-known company.
Tip #4: Think twice about jumping on an offer that is only good for a limited time. "If you have to act right away and they're trying to create an environment of an instant decision, you may want to step back," Johnson says.
Tip #5: Always pay with a credit card rather than a debit card, check or wire transfer. Most credit card companies will help you recover your money if you haven't received what you paid for. "Even though people are worried about credit cards, it is a way to protect yourself," says Audri Lanford, co-director of ScamBusters.org, an online newsletter that tracks scams, identity theft and urban legends.
Tip #6: Get everything you can in writing, whether it's to document a communications trail or to get an estimate for future work. You'll need all that paperwork if you're not getting what you were promised from the company and if you end up having to report the incident to the police or a reporting agency.
Tip #7: If you're not getting what you want from a business, the first step is to contact the company to alert them of the problem. If you don't hear back in one week, write to the president or owner of the company. The letter should cordially state your concerns and what you would like them to do. In the letter, tell the company they have two weeks to respond or you will seek formal dispute resolution assistance. If the company fails to reply to the letter, it's time to seek help from a resource like the Better Business Bureau or your state's consumer protection division. "If this is a real scam, you're not going to have success getting your money back," Lanford says. "If it is a legitimate company, there is a reasonable chance you'll have success."
Tip #8: Report the incident to the police. It may not always get your money back but the police may be able to track certain trends, as well as issue warnings to other consumers. "If there is a pattern, they'll do an investigation," Lanford says. The incident should also be reported to Fraud.org, a National Consumers League service that sends all reports to local, state and federal law enforcement agencies.
Tip #9: Report the incident to your state attorney general. The District, Virginia and Maryland all have online complaint forms.
Tip #10: Finally, use your gut instinct. If it sounds too good to be true, then it probably is.
So what are your tips for avoiding a scam? How have you handled being scammed? Have you ever avoided a scam by finding a company reported to the Better Business Bureau? Have you ever contacted your state attorney general about a business? If so, how did they help? Post a comment below.
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Posted by: HankTheCat | April 1, 2008 11:45 AM
Posted by: tia | April 1, 2008 5:46 PM
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