As an insurance advisor, you help your clients make smart buying decisions every day. But what about your own buying decisions? Are you doing enough due diligence to avoid buying defective or fraudulent products or services? If not, these tips will help you.
1) Know with whom you’re dealing. Always confirm a company’s owners, street address and phone number. Don’t do business with post-office boxes. If an online merchant fails to display contact info, proceed with caution.
2) Verify the company’s professional licenses. Does the firm work in a regulated industry? If so, check with its regulators to make sure it is in good standing.
3) Follow the paper trail. If you’re buying from a website, enter the site’s uniform resource locator (URL) into www.who.is/whois. This will generate site owner’s name and address. If this information is different from what’s on the website, ask why. Also, watch out for firms that register their domains on www.domainsbyproxy.com. This means the owners may have something to hide.
4) View its BBB record. The Better Business Bureau’s grading system isn’t perfect. But a large number of unresolved complaints should be a strong red flag.
5) Check out its business address. Is the company a home-based business or does it operate out of an office building? Home-based businesses aren’t inherently riskier. But they may lack capacity to serve you long term. A Google Street View search on the firm’s address may surprise you.
6) Determine its credit card policy. Accepting credit cards is a good sign, since it gives you the ability to contest charges. Try to avoid paying by cash or check, since it reduces your ability to recoup losses in the event of non-performance or fraud.
7) Get a written contract. Demanding a written agreement will help to smoke out scammers with no intention of delivering on their promises. Refusal to put deals in writing is a huge red flag.
8) Check for arbitration clauses. Arbitration clauses are becoming increasingly common, so it may be heard to avoid dealing with companies that require them. Still, read the fine print in advance so you know what you’re getting into.
9) Beware of down payments. They aren’t always bad, especially if the firm needs to purchase supplies in order to complete its work. Still, be careful about pre-paying if the amount is large or if you have other doubts about the firm.
10) Check recurring billing policies. If you approve a recurring bill, make sure you have the ability to cancel at any time. Also, make sure the company sends an email notice of payments coming due.
11) Tap into the “wisdom of the crowd.” Treat online reviews as an important “data point,” but not the only measure by which to evaluate a company. The same is true with online “complaint registries” such as Ripoff Report and Complaints Board. Visiting such sites can be helpful. But take angry rants with a grain of skepticism
12) Identify its email address. Be cautious of companies using a free Yahoo or Google email address. Are they so strapped for cash they can’t afford their own email? Are they trying to hide something?
13) Evaluate the firm’s transparency. Consider how willing the firm has been to answer your questions and provide written documentation. If the company offers excuses or gets hostile about your questions, find another vendor.
14) Finally, for large purchases, consider buying a background check on the firm’s owners. Available online for nominal fees, such services unearth civil suits, criminal convictions and bankruptcies.
Sources: National Ethics Association, www.ethics.net, and National Organization of Life & Health Agents.