consumerman

Ten commandments for being a smart consumer

March 6, 2012 at 9:51 AM ET

It’s National Consumer Protection Week, a perfect time to unveil the new-and-improved version of my Ten Commandments. Follow these rules every day and you should have fewer problems with the purchases you make and greatly reduce your chances of falling victim to a scam. 

1. Thou Shalt Do Your Homework  

Your time is precious. You’re in a rush and want to get it done now. But you simply must do your homework before you spend any significant amount of money on a product or service. 

Think of the hassle – in time and money – if that washer or refrigerator is always breaking down.  That’s why it’s so important to research different brands and models. Read online reviews. Talk to friends and neighbors. Price shop to find out what you should expect to pay. 

The more you know before you head to the store, the more likely you are to get a good deal on the right product. 

Remember the goal is the best value for your money, not necessarily the lowest price. A smart consumer looks for a good, reliable product that’s reasonably-priced. The cheapest product may not be the best deal in the long-run if it doesn’t perform, or needs costly repairs. 

2. Thou Shalt Not Assume Anything

A simple misunderstanding can lead to major problems. The best way to avoid this is to ask a lot of questions. 

Don’t assume the department store will remove your old mattress when it drops off the new one.  Ask. Don’t assume website search engines put the best deals first. They may get paid to skew the results to sponsors. Find out. Don’t assume the “economy size” is always the best price. Smaller sizes may go on sale for a lower price per pound or ounce. Check to see.

3.Thou Shalt Read the Fine Print

Sign a contract or agree to the terms and conditions on a website and you are bound by it. All too often important information is buried in the fine print.  Read all legal documents before you physically or digitally sign them. This is the only way to know what the company will do for you, what the company is allowed to do to you (i.e. share your personal information) and what’s expected of you.

4. Thou Shalt Get All Promises in Writing

It doesn’t matter what the salesperson promises. It doesn’t count if it isn’t written down. In a dispute, you cannot prove what was said without some sort of written documentation. Don’t do business with anyone who promises to do something but refuses to put it on the receipt or in the contract. 

5. Thou Shalt Keep a Paper Trail 

It’s easy to toss a receipt once you get home from the store. Better to keep it for a while. You may need it if you want to return the item. 

Some stores have strict return policies: no receipt, no return. Others will let you return something without a receipt, but you’ll only get the most recent sale price and/or a store credit. A receipt ensures you get the full amount back in cash. It also proves when you bought something if there’s a dispute about whether it’s still under warranty. 

6. Thou Shalt Review All Your Account Relationships

Constant change is the new normal. Banks revise their fee structures. Wireless and cable companies modify their packages and pricing tiers. You change how you use these services. Try to look at these business relationships once a year. There may be a better deal possible if you ask for it. Many companies won’t volunteer this information. You need to be proactive. It could save you some serious money. 

7. Thou Shalt Never Wire Money to a Stranger 

 Wire transfers are instant, irreversible and nearly impossible to trace. That’s why so many scammers try to get their victims to wire them money. If you don’t know the person or company requesting the wire transfer – don’t do it.

Some con artists mail out professional-looking checks for thousands of dollars. The letter says you’ve won a sweepstakes or lottery. All you have to do is cash the check and wire back some money to pay for taxes or processing or some other bogus reason. 

Reality check: you didn’t win anything. That prize check is counterfeit and if you wire off that money, you’ll never see it again. 

(Read: Money Transfers Can Be Risky Business

8. Thou Shalt Be Skeptical of All Advertising and Marketing Claims

False and deceptive ads can appear anywhere: on trusted websites, in well-known publications, on TV or radio. Don’t assume the publishing or broadcasting company verified the advertising claims. They rarely do. Prosecutors do their best to stop misleading ads, but they can’t keep up with problem. So you’re on your own. 

How do you fight back? Follow Commandment No. 1 and do your homework before you part with your hard-earned money. 

9. Thou Shalt Guard All of Your Private Information

Keep your private information private. Never give out passwords, pin codes or account numbers to an unknown caller – no matter how official they sound or what the caller ID shows. (Caller ID  numbers can be “spoofed” so they look like it’s the bank or police calling, when in reality it’s a bad guy in another state or country.) Hang up. 

The same rule goes for email requesting personal information. It may look official. It may say there’s a problem with your account and you need to respond right away. Don’t. Hit Delete, because this is just a phishing scam

Banks and other companies you do business with never call or send an email to ask for your personal information. They already have it. If you get such a call or email and want to see if there really is a problem with your account, call the company at a number you know is legit. For instance, from your statement, phone book or the back of a credit card. 

Shred all documents that contain personal information. Many identity thieves still use the old-fashioned way of stealing your Social Security and financial account information – they look in the trash.  

(Read: Fighting Back Against Identity Theft)

10. Thou Shalt Not Assume Every Transaction Can Be Undone

Many people think they have three days to change their mind after they buy something. That’s rarely the case. The Federal Trade Commission’s Cooling-Off Ruleonly applies to sales of $25 or more that take place at your home or away from the company’s normal place of business. In other words, you cannot buy a car and try to take it back to the dealer if you don’t like it when you get home.

Some states also have cooling-off rules for time share purchases and health club or campground memberships. But for most things, merchants are not required to accept returns for products that are not defective. This is a customer service they may or may not offer.

ConsumerMan Note: This column marks my sixth anniversary with msnbc.com. Thanks to everyone who has written with story ideas and words of encouragement.

I hope you’ll follow me on Facebook. This is great way to get the information you need to make smart decisions in an increasingly complicated marketplace.

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