Be your own consumer watchdog

Finding a company or professional worthy of your business can be difficult. How do you gauge honesty, fairness, experience, and training? Fortunately, whether you're looking for someone to write your will or renovate your kitchen, there are tools and techniques to help you.

Ask friends and family

Getting referrals is especially important when you're looking for professionals who require a high level of trust, including doctors, lawyers, home-improvement contractors, and car mechanics. But you should explore further. One person's good experience doesn't mean other customers are equally happy. Maybe a business does well under certain circumstances but not others, or has changed policies or owners.

Get contact information

Don't get involved with a company that doesn't provide a telephone number and street address, especially if it conducts business online. Call or send an e-mail message to find out how well the company responds to questions.

You can verify a website's owner by entering the addresses on a "who-is" server, such as www.who.is/whois. Ask questions if the address given in the domain registration differs from the address on the company's website or in its literature. And be careful if the company lists incomplete or clearly bogus information, such as an address in "Anytown, USA," or if it has registered its domain name through a proxy service, such as Domainsbyproxy.com, which allows website owners to disguise their identity and location.

Check affiliations and certifications

Some professional organizations take complaints from consumers, rate businesses, issue certifications, and maintain lists of members who have agreed to abide by its standards and participate in dispute resolution. Among the best known is the Better Business Bureau (www.bbb.org), though it has its limitations (see box on facing page). Another is the Financial Industry Regulatory Authority, or FINRA, an independent regulator of the securities industry. FINRA's BrokerCheck service (www.finra.org/brokercheck) gives you background information on registered financial firms and individual brokers, including any disciplinary actions.

Other groups worth checking with include the various state medical and bar associations; the National Association of Consumer Advocates (www.naca.net/); the National Funeral Directors Association (www.nfda.org); the American Society of Travel Agents (www.asta.org); and the Certified Financial Planner Board of Standards (www.cfp.net/).

But membership in an association doesn't mean that a company or the association itself is worthwhile. And some third-party groups that provide certification seals or otherwise rate companies might charge fees for their endorsement but provide little or no oversight.

Even legitimate certifications, like the Better Business Bureau's Accredited Business seal, are sometimes used without authorization. And we've seen some companies displaying seals from Web security and privacy companies, such as TRUSTe and McAfee, that have F or D ratings from the BBB because of consumer complaints.

So be sure to check several sources. If you're relying on the certification or professional designation from a source you don't know, contact the issuer to make sure what you're seeing is genuine.

Check online user reviews

See what others are saying by doing a Web search for the name of the company or professional along with such words as "review," "complaint," "fraud," and "scam." Amazon.com, Bizrate.com, and other shopping websites let users rate retailers they feature.

Of course, reviews might be posted by the company itself or by other biased parties. Scammers sometimes set up "rating" websites that warn about a particular industry and then recommend "legitimate" companies. Even unbiased reviews can be misleading or based on isolated incidents. The more reviews you can find, the better the chances you'll get an accurate picture.

Verify licenses and registrations

Certain types of businesses must be licensed or registered. The rules, which can vary by state, apply to professionals like doctors, lawyers, and insurance brokers, as well as plumbers, electricians, and people in other trades. Dealing with an unlicensed or unregistered professional is not only risky but also might limit your rights. In Connecticut, for example, hiring an unregistered home-improvement contractor makes you ineligible for compensation under a state fund that protects victims of fraudulent or insolvent contractors.

Read policies and contracts

Whether you're dealing with a company in person or online, read all policies and contracts thoroughly. Find out about returns and refunds, and any restocking fees; dispute handling, including arbitration agreements; and limits on warranties, express or implied. For online companies, read the privacy policy carefully.

This might be easier said than done. Businesses don't always present all of their policies clearly. They might be spread over several pages on a website, placed behind a cash register, or written in cryptic legalese. If you don't see or understand something, ask. And get it in writing, preferably in plain language.

It's always a good idea to check out companies with the Better Business Bureau. But the BBB has its limits. For example, it doesn't rate professionals who have their own governing boards, such as doctors, lawyers, and architects. And you won't find reports on many companies, especially new businesses.

Also, ratings don't always tell the whole story. For example, over the last three years HealthBuy.com, which sells health and beauty products, has had 275 BBB complaints, alleging misleading advertising, unauthorized credit-card charges, and difficulty canceling ongoing purchase programs, which some consumers say they agreed to unknowingly.

The BBB says that the company has given refunds or canceled orders for consumers but that it hasn't responded to complaints about deceptive sales tactics and false advertising. So why did it get a B rating and BBB accreditation? When we asked, the bureau reviewed the record, downgraded the company to a C-, and pulled its accreditation. HealthBuy.com said it has taken measures to correct the problems, which it said were caused, in part, by an affiliate that was incorrectly marketing one of its offers as a free trial.

Some reports omit information you might find useful. For instance, the bureau lists complaints and government actions for only the last 36 months. That's why the report for Sleepy's, the bedding retailer, no longer includes references to the 2004, 2005, and 2007 actions New York and New Jersey consumer officials took against the company in connection with alleged deceptive practices. Sleepy's, which had been rated Unsatisfactory, now has an A rating, despite 815 complaints over the last 36 months, four of them unresolved.

And the BBB's information might not be current. It took the metro New York bureau more than a month to revise its report on Publishers Clearing House to include the company's September settlement with 32 state attorneys general and the District of Columbia. The states had accused the company of violating 2000 and 2001 agreements prohibiting it from using deceptive practices to induce people to participate in its sweepstakes. But it still gets a B rating, down from B+.

What to do

Along with a company's letter rating, consider the number and types of complaints it has received.

This article appeared in Consumer Reports Money Adviser.