Protecting Your Money From 2013's Most Common Consumer Complaints

Would it surprise you to know that the top consumer complaints of 2013 included problems with new and used auto sales, trouble with home repairs, and scams against the elderly? These selected problems from the latest national report based on data from local and state consumer protection agencies and compiled by the Consumer Federation of America and the North American Consumer Protection Investigators don’t surprise me at all. In over 30 years as a consumer advocate, I’ve observed many such complaints and have worked to provide useful information to help you avoid such problems. Directions Credit Union is also a vital advocate for your financial well-being and provides resources to help you in the three challenges I’ve highlighted—buying a new or used vehicle, carrying out successful home repairs or remodeling, and protecting yourself or older family members from targeted scams.

Successfully Purchasing a New or Used Vehicle

Year after year, misrepresentations in automotive sales advertising and sales negotiations remain a top, if not the top, consumer complaint. The best way to protect yourself is to become an informed buyer. Before you ever set foot on a dealership lot or start a sales conversation online, take these steps.

  • Educate yourself about the vehicle you want to buy. If the car is new, determine what the basic car and options you want cost the dealer using resources such as NADA.com, Edmunds.com, ConsumerReports.com or KBB.com. Check out the vehicle’s safety ratings. For a used vehicle, remember that each car or truck is one-of-a-kind. First, read all you can about the model’s performance and safety record. Check the general wholesale and retail prices for the model you like in guides such as those mentioned above, but remember there is no “suggested retail price” for a used vehicle. Get a report of the vehicle’s history, such as CARFAX, but always have a used vehicle checked by a mechanic you trust before you complete the sales transaction.
  • Arrange a pre-approved loan at Directions Credit Union. In most all cases, the interest rates and loan terms offered by the credit union will beat other sources. This is particularly true for used vehicle loans. Automotive manufacturers and dealers may advertise super-low loan rates, but it’s important to remember that very few buyers may qualify. With a pre-approved loan, you know how much money you have and you can realistically compare another other loan terms.
  • Determine the value of your trade-in. You can determine a general wholesale value using a guide such as NADA.com, Edmunds.com or KBB.com. If the trade-in value offered by the dealer is too low, you may decide to sell your car yourself. See our tips on how to do that.

For a step-by-step guide for how to manage the negotiation and get the best value when you buy or lease a vehicle, see our FoolProof Car Buying Guide, Take Five Steps to Save Before You Shop for a New Car and How to Sell Your Vehicle Yourself.

What's the Secret to Not Being a Victim of These Consumer Complaints

  • First, educate yourself about the subject or field
  • Next, take your time researching options
  • Then take your time to make decisions
  • The many resources provided by FoolProof will help you get started.

Achieving the Best Home Repairs or Remodeling

What are your home improvement goals? Does the exterior trim need painting or the whole house? Are you planning to convert a bedroom into a home office or to update the kitchen or bathroom? Can you do the job yourself or do you need to hire a contractor? If you need a contractor, how can you find a qualified expert who’s right for your job? These are just some of the topics addressed in the reports in our FoolProof Homeowner’s Guide. Also remember that Directions Credit Union offers competitive home improvement loans.

Meanwhile, beware of these ever-active home improvement scam techniques.

  • Door-to-door offers of repairs at a “bargain” price. Individuals representing themselves as contractors go door-to-door offering to repair or repave your driveway, paint your house, repair guttering or do other such tasks. The door-to-door approach is a major red flag. Another red flag is the claim that they have material “left over from another job” and so can offer you the work “below cost.” Such door-to-door scams typically increase after storms. Flyers placed in your mailbox or door may come from reputable contractors or fraudsters; so check any company or individual out carefully.
  • Require cash only or all cash upfront terms. Such tactics are typical of scam artists. Insist on a written contract with all terms spelled out (no blanks). Stage payments as the work is done; do not make the final payment until all work is completed to your satisfaction.
  • Suggest that you get a home improvement loan from a source the “contractor” knows or arranges. This is a major red flag. That’s true even if you called the contractor first (rather than having the contractor approach you). Always get independent financing, and start with your credit union, which typically offers very competitive terms. Insist on complete contracts, read the terms carefully, and make sure nothing is left blank.

Protecting Yourself and Family Against Scams Targeted at Older Adults

Older adults usually care deeply about their families and communities, they are law-abiding, and often, they worry about continued independence and health. Many of the scams targeting older adults take advantage of such positive values to steal from the victims. The following scams have been very active lately:

  • The grandparent scam. The phone rings, often late at night or very early. A stressed voice claims to be a grandchild (often by name) who is in jail in a foreign country (or distant city) and needs money wired immediately to get out of jail and get home. In a variant, the plea comes by e-mail. In reality, the voice or email is a scam artist and any money sent is long gone. Plus, the scam artists know you are a ready target and will hit again with some other ploy.
  • You owe the IRS $903 today! If you don’t pay immediately, the FBI will come to arrest you in a short time. Who doesn’t worry about making a mistake on a tax return? Such calls are always fraudulent—neither the IRS or FBI do business like this. But the voice on the line will badger and threaten, getting louder and more abusive to try to keep you from thinking rationally. They often say they will send someone to your door for the check. What should you do? Say nothing and hang up or delete the email.
  • Retirement Investment Fraud. Will you have enough money to last your whole retirement? Scam artists love preying on this natural worry. There are dozens of scams that come by mail, email, phone and in person. Taking time to educate yourself and taking time to carefully check out any investment options can help you or a family member avoid these types of frauds. For more information see Avoiding Retirement Fraud from Investor.gov.

To learn more about these and other scams targeting older adults see our reports on Are You Alert for New Financial Scams Targeting Older Americans?, Older? Are You Alert for These Common Financial Scams, and Don’t Let These Scams Steal Your Personal Financial Information.

So, What’s the Secret to Not Being a Victim of These Consumer Complaints? The best defense against problems and fraud in all consumer transactions is first to educate yourself about the subject or field and then to take your time researching options and making decisions. FoolProof provides many resources on many topics to help you get started.


Originally published September 2014.

Powered by FoolProof

E-Alert

Follow Directions Credit Union