How to Protect Yourself From Scams

It seems that every day I hear about someone being ripped off by scam artists. Are there some good resources to help protect myself against scams?

There sure are. Scam artists continue to use a wide variety of tactics to separate you from your money, and they’ve been especially busy taking advantage of the economic downturn (see The Top New Consumer Complaints for details about this past year’s biggest problems). But you have several resources available to help you check out a company or an adviser before you become a victim or to help you file a complaint if you have a problem.

A good place to start is with your state, county or city government’s consumer protection office (see the Consumer Action Web site for links), which is often affiliated with the state attorney general’s office. The Web sites of these agencies often have databases that allow you to look up complaints against all kinds of businesses; you can also file a complaint to warn others of your problems. The agencies’ staffing levels vary widely, but some will investigate your complaint and may even help you get some money back. The consumer protection agencies surveyed by the Consumer Federation of America received more than 252,000 complaints last year and obtained more than $208 million in restitution and savings for consumers. These agencies can also let you know about other agencies that might license or regulate specific types of business in your area, such as a state contractor’s licensing board.

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The Better Business Bureau is another good place to look up companies. The BBB assigns letter grades, from A+ to F, based on a business’s complaint history, whether the company has responded and worked to resolve complaints, and whether the business holds the appropriate licenses, among other criteria. You can also file complaints with the BBB, which will often work with the company to help resolve your problem.

You can check out investments and advisers with your state securities regulator. The Fraud Center of the North American Securities Administrators Association also has many great resources to help you avoid becoming a victim. You can look up a broker’s or a brokerage firm’s licensing, background information and disciplinary history through Finra’s BrokerCheck Web site; research investment advisers through the Securities and Exchange Commission’s Investment Adviser Search.

To search for a financial adviser who holds the Certified Financial Planner credential, go to the CFP Board of Standards Web site, where you can also see whether an adviser’s CFP credential is up to date, find out about any disciplinary action, or file a complaint against a CFP professional. For more information about how to pick a financial adviser, see How to Spot Trouble With a Financial Adviser.

Contact your state insurance department to see whether there have been any disciplinary actions against an insurance agent or company, or to file a complaint. You can find contact information for the state regulators at the National Association of Insurance Commissioners Web site. You can also check out an insurer’s complaint record at the NAIC’s Consumer Information Source, which is a great resource to learn about the type of complaints an insurer has received and how it stacks up against other companies.

For identity-theft resources and information, or to report ID theft, see the www.ftc.gov/idtheft Federal Trade Commission’s ID Theft site. You can also find alerts about online and e-mail scams at the FBI’s cyber threats page.