THE BLOG
10/03/2014 08:19 am ET Updated Dec 02, 2014

Finding Out Whom to Trust When You Do Business Together

I began thinking about the importance of knowing whom to trust in doing business together when I experienced two major breaches, one as a customer seeking services and another when I was providing services myself. In both cases, I hadn't done any advance checking of these companies. In one case, I was drawn by the convenience of finding a service in my town; in the other, I was willing to extend credit based on a promise of future work and an offer to pay the balance at a meeting where I was invited to pitch my services. Plus I was impressed by the flair and confidence of the person hiring for me.

But in both cases, I made major mistakes by not doing some careful checking in advance. Many people don't do this either, because they don't want to take the time to check and because they want to use the service or get a customer or client to opt for their service now. But often it pays to check and not hire the service provider or extend credit until you do some checking.

The first situation, which I have written about in Huffington Post articles: Auto Repair Scams and in A Warning About Warnings, occurred when I went to a local auto repair service. I went there to have my old Toyota station wagon checked to be sure it would be safe to go to Las Vegas, and after the inspection the manager assured me it would be fine, so I got the air conditioner fixed for the trip. But he didn't warn me about the risks I might face in driving a 22-year old car with 144,000 miles on it to a very hot location during the summer, though I knew of a few other people who had driven cars over 200,000 miles. But the auto repair expert had a duty to warn me, since he was the expert and I sought out his advice on this very subject. Then, since I wasn't warned, after I fixed the air conditioning, the car overheated on my third day in Las Vegas, and fearing the risk of taking the car back across the desert after fixing the radiator, since other things could go wrong, I ended up getting a new car I couldn't afford, and later the auto repair service denied any responsibility for what happened, even the unnecessary air conditioner repair I wouldn't have gotten if warned of the risk; I would have flown and rented a car instead. However, if I had checked out this company's reviews, such as on Yelp http://www.yelp.com, before deciding to take my car in for an inspection and then a repair, I would have looked for another service center, since the company had several negative reviews about poor service and unnecessary repairs -- and now they have my bad review, too.

The second situation occurred when I was in the position of providing a service to a prospective client. Normally, with a new client, I would get a retainer check and wait for it to clear my bank or get a payment through PayPal or a credit card. But in this case, the client seemed so stylish and personable, talked about hiring me for extensive work, and invited me to present my writing services at a weekend event at a luxury hotel. So I agreed to take small advance check and spent two days rewriting a manuscript. But after that the client had low attendance at the weekend event and claimed to be waiting for checks to come through from expected clients. So in the end, not only did the initial check bounce, but the client only paid a small amount on account. Then the additional payments due stopped coming, along with the client's excuses about why no money was available to pay me due to high office expense and the funds needed to bring in new clients. That's when I thought to do some checking about this client and discovered several scathing reviews on Yelp from people who had hired this person to provide some services under another business name. But they didn't get the promised services or obtain a refund for the services they didn't get. Needless to say, had I done some checking in the first place, I would never have advanced credit or done as much work as I had without being paid up front.

So where do you check? One of the most well-known review services is Yelp, which covers most of the service industry, and even if some smaller shops and services don't have any reviews, the companies will often be in the Yelp database. Plus now there are other services, which include the businesses listed in Google Places which turn up in a Google search. Another is Angie's list, which charges a small membership fee to consumers and lists business for free. Another site is Yahoo Local which has over 50 million reviews. A few others include Citysearch, Merchant Circle, Insider Pages, and FourSquare. Then there's the local Better Business Bureau and Chamber of Commerce, or try putting the name of the company owner or company in Google search and see what turns up. If there has been any extensive negative commentary about the company or company owner, it is likely to show up there

In short, before you make any major commitment to purchase services or agree to extend a substantial amount of credit to anyone, check them out to see if there are any warning signs through negative reviews online.