Finance Your Budget How to protect yourself from getting ripped off

How to protect yourself from getting ripped off

The New Daily
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Getting your car fixed, fillings at the dentist, or even the humble taxi ride are prime examples of everyday expenses where we place faith in the experts.

They also fall under the umbrella of ‘credence’ goods – an exchange where it’s often impossible for the consumer to know if they actually got what they paid for.

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A trip to the mechanic to pinpoint the source of that strange rattle you’ve been hearing for weeks, or even for a simple service, might leave you with a list of problems you never knew existed, not to mention an expensive bill. Most consumers will question whether all those repairs were legitimately needed or if they’ve been taken for a ride.

It’s an interesting conundrum, which Uwe Dulleck, Economics and Finance Professor at the Queensland University of Technology, has researched.

He says doctors, mechanics, tradespeople, financial advisors, and computer specialists, are typical occupations where prices can be exploited.

“On the one hand these people know what you need, but on top of that the customer might not actually be able to observe what they got,” Professor Dulleck explains.

While most people do the right thing, it’s difficult to entirely avoid getting stung, there are ways to level the playing field by being savvy and acting assertively.

Don’t go in blindfinancialadvice

Before you even approach a sales or service person, do a little research about what you are getting. A little knowledge can go a long way.

Professor Dulleck says consumers should review their needs.

“There is a tendency for people to actually sell you more than what you need.

“Whenever we deal with more complex goods or services it’s very hard to tell what’s going on.”

Use people with credentials

When finding the expert you need, consider those who are busier and have a good reputation.

“This is a sign that their customers may be returned customers and therefore experts may have delivered good service before,” Professor Dulleck says.

Professor Dulleck also advises being wary of people driven by money.

He believes there is good service out there if you search hard enough and that many people are actually trying to do what’s right by the customer as long as it’s a win-win situation.

Before you pay, think critically

Many consumers let themselves get swept up in fast-talking sales lingo or employ the services of a tradesperson for a renovation and take their word as gospel.

An example is accessing a financial adviser who might appear independent but in fact earns a commission through an alignment with one of the big banks. You can get around this by requesting a copy of their financial services guide which will outline who owns the company and if it is aligned with any other service providers.

“Ask yourself how this expert knowledge can be abused to take advantage of you,” Professor Dulleck suggests.

“It helps to get people thinking about what the incentives are of people in these markets.”

Watch out for the catchConman

“If a price for a service is too good to be true then there’s a good chance it’s not,” Professor Dulleck says.

“If you go for these types of offers, be aware that it’s a bit more like having a lottery ticket than having certainty.”

Know your rights

There’s no fool proof measure to protect yourself from getting ripped off.

If you’re worried about a potential purchase then it’s wise to ask for a written quote and make sure there is a clear understanding of the costs from the outset.

If you do have a complaint you want to take further then contact consumer protection agencies in your state here

Be wary of door knockers

Last year, the Australian Competition and Consumer Commission won a case against a company that sold vacuum cleaners costing more than $2000 to vulnerable elderly women.

It argued salespeople gained entry into homes by offering free demonstrations that lasted 90 minutes, before homeowners bought products they didn’t necessarily need or want.

Consumers Affairs Victoria recently highlighted similar issues.

“They offer jobs such as gardening, painting, roof repairs and driveway sealing at a cheap rate, putting residents to say yes on the spot,” says director for consumer affairs, Dr Claire Noone.

“Travelling con men prey on unsuspecting victims by knocking on their door unexpectedly and offering them a deal too good to be true.”

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