Tips to avoid the top 10 consumer problems

This post comes from Brandon Ballenger at partner site Money Talks News.

Sooner or later everyone gets ripped off. If you'd rather make it later, it makes sense to look back over the more than 1 million complaints filed with the Federal Trade Commission every year to see what problems people are encountering and how you might avoid becoming a victim.

The FTC makes it easy by compiling an annual list of the top 10 most frequent consumer complaints. Check out the following video where reporter Stacy Johnson reveals the top five consumer complaints, then meet me on the other side for more.

There's one piece of advice that applies to many of these problems, especially the ones that are variations on a scheme: As U.S. Postal Inspector Bladismir Rojo puts it, "There is no free money. If it's too good to be true, it is not true."

With that in mind, let's look at the full list of top 10 consumer complaints from 2010:

1. Identity theft. With more than 250,000 complaints last year, accounting for almost one of every five, no wonder this was in first place. Check out our story "7 ways to prevent identity theft and 7 steps to recover." And while we mentioned "shredding your sensitive mail" as a tip in that post, Mike Galvin, a spokesman of the Better Business Bureau, takes it a step further. He says, "Shred all mail that comes into your house. Most mail has personal information, whether it's your name, address, birthday, Social Security number, and account numbers."
2. Debt collection. This got about 145,000 complaints last year, or 11% of the total.  Remember: Just because you're in debt doesn't mean you lose your rights. According to the FTC, debt collectors can't call before 8 a.m. or after 9 p.m., while you're at work if you tell them not to -- or at all if you notify them in writing. They also can't make threats of violence, use profanity, make repeated calls, or misrepresent themselves, the debt, or any documentation. Depending on what state you live in, they can't make certain threats about legal action either. For a lot more on credit and debt, check out the in debt section of the FTC website. And for a lot more about dealing with debt collectors, see "Abused by a debt collector? Get a free lawyer." 
3. Internet services. More than 65,000 people complained about this in 2010, about 5% of total complaints. These include misleading "trial" offers, difficulties in canceling an account, spyware, adware and malware issues, and undisclosed fees on Internet service bills. What can you do about it? Read the fine print before you sign up. Ask about fees, including installation and cancellation charges, and post-promotional period price hikes. Also, check out this FTC consumer alert. And for free spyware, malware and virus protection, see our story "Antivirus software is a waste of money." 
4. Prizes, sweepstakes, lotteries. At just over 64,000 complaints, this one's hard to understand: Why do people believe they've won something when they've never signed up? Here's a news video about people in Minnesota being defrauded by Jamaican scammers. The scam works like this: You've supposedly won a huge sum of money (often, from a foreign country, which is illegal under federal law) and have to pay taxes or some kind of fee to get your "winnings." If you make the mistake of paying up, they'll come up with some other ridiculous fee hoping to get more of your money. Don't respond to these solicitations. Doing so just means you'll get more of them.
5. Shop-at-home and catalog sales. There were 60,000-plus complaints in this area, which covers failure to deliver and late delivery, hidden fees, and dishonored guarantees on purchases online, by phone or by mail. You can't really avoid these problems entirely, and sometimes even reliable companies make mistakes. But you can decrease the odds of it happening to you by buying from merchants you know or have received recommendations about. If you're in unfamiliar territory, check for complaints by doing a Web search. The FTC explains your rights for shopping from home and how to handle violations.
6. Impostor scams. Making its first-ever appearance in the top 10 with 60,000 complaints, this rip-off involves people posing as authorities, your bank, or friends and family. You might get an urgent phone call or email from a name you recognize, but it's actually from a crook. Easy way to check? Establish contact from your end, rather than responding directly to the message. Don't fall for a scammer's sense of urgency -- verify. The FTC has more on spotting impostors here. And if you want to see an example of a common scam email, Stacy published one in "Help! I'm trapped in London!"
7. Internet auctions. This one, with more than 56,000 complaints, is about not getting what you ordered, or feeling misled about a product's features or condition. The first thing to do -- after contacting the seller and making sure it's not an honest mistake -- is to check what the auction site's policies are. Here are eBay's tips on avoiding fraud, for example. Another suggestion is to use a payment method that comes with protection. Rojo says, "I would use PayPal if I was going on eBay. That would be the number one thing I would look for." Why? Because PayPal offers several consumer protections, including the option for a full refund and protection of your financial information. Credit cards also offer good protection, whereas wiring money offers none.
8. Foreign money/counterfeit check scams. This one netted almost 44,000 complaints last year: The scammer buys something from you, perhaps in an online auction. But rather than sending you the amount they owe, you receive a cashier's check for more than that amount. They then ask you to deposit the cashier's check and send them the difference. The problem? Their check was counterfeit, something that might take weeks for your bank to discover.  The solution? Don't take checks at all in online sale situations.
9. Telephone/mobile services. This category, with more than 37,000 complaints last year, includes being charged for "toll-free" calls, charges for calls you didn't make, and misleading prepaid phone cards.Calling an 800 or 888 number is usually toll-free; it's the 900 prefix that costs you. The FTC has information on selecting reputable calling cards and rules about 900 numbers.
10. Credit cards. Even though credit cards offer consumer protections, there's still plenty to complain about -- 33,000 people last year did. These complaints include billing issues, interest rate changes, late fees, credit disputes, and overcharges -- plus, of course, fake credit offers. Check out "3 tips to avoid the latest credit card scam," always investigate and report suspicious charges immediately to reduce liability, keep receipts of your purchases, and always verify credit offers by doing a little research before you sign up.

This certainly isn't the first time we've written about rip-offs. Check out the Better Business Bureau's version of the top 10 worst scams of 2010, which we covered in December.

More from Money Talks News and MSN Money:

• 10 tip-offs to online rip-offs 
• The 10 golden rules of scam prevention
• The 10 golden rules of saving on everything
• Can you trust the Better Business Bureau?
• Japan's earthquake: How to avoid charity scams
• How thieves will steal your identity