(MONEY Magazine) – When Barry and Karen Wiedemann of Placerville, Calif. noticed white smoke spewing from the tailpipe of their 1980 Mazda 626 last July, the local mechanic they turned to said they needed a new engine. Cost: $2,000. They had the car towed to another garage instead and told its owner to install a used engine. After paying $1,270, the Wiedemanns -- he's a communications equipment specialist for the U.S. Forest Service, she's a high school guidance counselor -- were aghast to discover during idle chitchat with the second garage owner that they hadn't needed another engine, merely a $25 vacuum modulator. So the couple drove back to the first garage to ask its owner to make amends for misleading them. ''He was ready to sell us another engine again,'' says Karen. The Wiedemanns then called in a mediator from the California Bureau of Automotive Repair. Within two weeks, the first garage owner agreed to pay them $450 -- a compromise figure. The couple kept the engine. As the Wiedemanns found out, you can get some or all of your money back when you get ripped off or are just dissatisfied with a local member of the service economy. Complaining to the business at fault -- or to some higher authority -- is worth the trouble, if you know what to do. Fewer than 10% of unsatisfied customers take their complaints to a third party with enough clout to make the provider shape up, such as a government agency, a mediation or arbitration program, or a small-claims court. More should. Many people in that not-so- silent minority who turn to these referees walk away as satisfied customers. Admittedly, getting your money back is no cinch. ''You are being rewarded for your time. If you're out $2,000, don't expect to get it back with a 20- second phone call,'' warns Ralph Charell. He should know. Charell, author of Satisfaction Guaranteed (Linden Press, $14.95), has appeared in the Guinness Book of World Records for recovering more than $100,000 in cash, products and services through creative kvetching. To help ensure that your time is well spent, first take these four steps: -- Define the problem precisely. For example: ''I paid $5,000 for a procedure that most doctors in this area charge half as much for.'' Or: ''The catalogue said this stereo came with a cassette deck, but when it arrived there wasn't one.'' Weak expressions of disappointment -- ''the catered meal wasn't very tasty'' -- are definite nonstarters, according to veteran arbitrator Philip Breslin of Bethlehem, Pa. -- Demand the proper remedy. Do you deserve a full refund? A partial one? A refund plus damages? If you lounged around for two weeks in a beach house, horrid though it was, you are clearly not entitled to get back your entire rent. An example of overreaching is demanding payment for lost wages because your airline's flight was canceled and you couldn't get back to the office for a day. -- Document your case. Collect all receipts, repair orders, leases, tickets, warranties, canceled checks and contracts. Hang on to copies of correspondence, and keep notes of any conversations you had about correcting the problem. Be sure to compile evidence of any actual financial loss resulting from the foul-up, such as essential car rentals and hotel tabs. -- Find out your rights. Don't just read the contract or warranty. Call the government agency that licenses or regulates the service. (For publications listing such agencies and other sources of advice, see the box on page 158). If you don't know where to turn, start with your state consumer protection agency or attorney general's office. Whichever agency you call, ask to speak with the staffer who handles your type of problem, and request any written information that will help you get your money back. Now you are ready to take action. In a case of suspected fraud, go straight to your city or county government agency. Otherwise, begin by registering your complaint with a pleasant and polite call to the person who performed the service. You may find this direct approach will be all it takes for success. When you make your pitch, run through the complaint succinctly in an authoritative tone. Say exactly what you want and give a deadline (two weeks is usually reasonable). Demonstrate that it is in the company's interest to satisfy you -- and sooner rather than later. If round one is a draw, keep fighting. Ask for the local manager and then the vice president for consumer affairs, if one exists, or the manager of customer service. Should the VP give you the runaround, place a call to Mr. or Ms. Big. Often the top honcho or his subordinates will tell you to put your demand in writing. Fine. Keep the letter to one page and enclose copies of relevant documents. If you are writing to someone you don't intend to turn to again, let the recipient know that you're mailing or faxing copies to a few well-chosen authorities with a direct interest in the matter, such as your insurer or the appropriate regulator. Otherwise, forget the threatening carbons. Even after you have wheedled, cajoled and hinted darkly in every manner possible, you may get little or no response. Write one more time, and put the company on notice that you will pursue the matter further if you get an insufficient response. This time, signal that you'll be notifying a bit more of the western world. If this step also fails, don't despair. You must push on by seeking help from the agency, person or group with the most experience handling your type of problem. Essentially, these are your choices: You can enlist a local or state government regulatory agency to take legal action. The Better Business Bureau (BBB) and professional groups or licensing agencies offer independent mediators to try to help consumers and business owners come to agreements. You can ask the BBB or a professional or industry group to bring in an arbitrator who will make a decision, as long as the business owner agrees to this form of complaint resolution. Finally, you can take your case to the nearest small- claims court (for a state-by-state list and tips on collecting court judgments, see page 150). What follows are assessments of your alternatives, with advantages and disadvantages of each: -- A local or state government agency. Theoretically, the agency's fraud- busters use their clout to provide free, speedy relief to victimized constituents. In reality, some government consumer officials are godsends; others are worthless. There's no way of knowing until you try. In all cases, expect the agency to be understaffed and overworked, however. And plan to fill out a mound of paperwork. Understand too that once you file your case in small-claims court, the government agency will drop your problem. If you don't know which agency to turn to, start by calling City Hall; ask for the person who handles your type of complaint. You will be directed to the proper authority. Chances are, if your beef is with an insurance company or agent, a bank, a utility company, a car dealer or a garage, there's a state consumer agency that specializes in your problem. -- Better Business Bureau mediation or arbitration. The Better Business Bureau is a 77-year-old private, nonprofit group comprising 180 local consumer- protection programs across the country. BBBs are funded by their member businesses, but they often rule in the little guy's favor. For example, consumers who used the BBB to arbitrate car problems in 1987 reported that they were satisfied with the outcome around 60% of the time. Most BBBs have such Autoline programs specifically to arbitrate disputes between consumers and car manufacturers other than Chrysler and Ford, which have their own complaint systems. You begin by calling the nearest BBB chapter for a complaint form. Once you fill it out and send it back, the agency will give the business a copy and will await a response. Within two weeks, a BBB employee will try mediating the dispute for you. If mediation fails, you can ask for an arbitrator or sometimes a panel of two or three referees. Some local BBBs determine whether their members can refuse to arbitrate complaints other than Autoline; others make arbitration mandatory. The BBB usually also lets consumers ask for consequential damages (the cost of replacing a $100 sweater ruined in the course of a $3 cleaning job) as well as a refund or a new performance of the service itself. Most BBBs guarantee to deliver arbitration decisions within 10 days of a hearing. When a BBB arbitration panel rules in your favor, there's little chance that the business owner will stiff you. BBB members know this is part of the bargain for membership in the group. -- Trade association arbitration. You can sometimes take your case to a national trade association's consumer arbitration panel (CAP) specializing in complaints about your type of service. Car dealers, funeral homes, interstate movers and manufacturers of furniture and heavy appliances run CAPs. As with BBBs, consumers don't always come away winners. In 1987, the car dealers' panel, AUTOCAP, resolved 44% of its 3,979 complaints in favor of car owners. You will likely have to pay a filing fee of $40 to $300 or so when using a CAP. This outlay is usually refundable if you win. Jim Fishel, a vice president of the Recording Industry Association of America in Washington, D.C. (pictured on page 151), recently won a case against a mover in the arbitration program sponsored by the American Movers Conference. Fishel bought an $8,500, 13-piece Art Deco dining room set on a business trip to Los Angeles in June 1985 and paid the mover $1,500 to ship it to his home in Hastings-on-Hudson, N.Y. The furniture arrived one rainy night with two large gouges in the table top. When Fishel learned that he would have to shell out $2,200 to strip and relacquer the table, he asked the mover to ; pay. After nearly a year of exchanging dagger letters with the company, Fishel called for an arbitrator and asked to be reimbursed the $2,200. Two months and one repair estimate later, the panel gave Fishel the full amount. ''The little guy finally won,'' he crows. -- Independent arbitration. If your case exceeds the limit of small-claims courts where you live and involves a complicated contractual matter such as a major renovation, consider turning to one of a dozen or so independent arbitration organizations. The largest, the American Arbitration Association, has 32 regional offices around the country. The AAA doesn't come cheaply, however. Cases involving up to $20,000 require an administrative fee of 3% of the amount you are asking, with a minimum charge of $300. The business owners must agree to an AAA hearing and they usually will, to avoid an expensive, drawn-out court proceeding. You may need a lawyer; many independent arbitration cases are complex and turn on fine legal points. -- Mediation and arbitration by professional groups and licensing agencies. If your beef is with your doctor, lawyer or stockbroker, consider going to a professional group or licensing agency. But don't expect to win a refund if you are merely unhappy with the outcome of your divorce, real estate suit or criminal trial, says David Johnson, director of the office of attorney ethics of the New Jersey Supreme Court. County medical societies have judicial committees that handle written complaints -- many concern overcharging and improper treatment -- against members. The committees initially try mediating disputes -- that is, helping the parties come to a mutual decision. Should mediation fail, the committee will arbitrate, independently ruling whether the doctor should give you a refund. If you don't think the local medical association will give you a fair hearing, take your complaint to the appropriate government licensing agency. Here, outsiders rule on complaints, and the agencies are given legal authority to enforce judgments. Many states now have what are known as client security funds to cover losses if a lawyer cheats you. Maximum amounts typically range from $25,000 to $100,000. As a result of a recent Supreme Court ruling, most contracts that investors sign with brokers now call for binding arbitration. Today, 11 different panels conduct such hearings -- the self-regulatory bodies of the nine stock exchanges, the National Association of Securities Dealers (NASD) and the American Arbitration Association. Your contract will specify which arbitrators you can use. The most objective ones are those run by the AAA and the NASD (for more on brokerage arbitration, see Money Update, page 15). -- Small-claims court. Going to small-claims court can often be the best route when you have exhausted all other possibilities to recover your cash in a dispute over no more than $1,500 or so, the usual court limit. Compared with higher courts, small-claims court is fast, easy to navigate and inexpensive (typical cost: a $5 to $25 filing fee). But small claims judgments are notoriously difficult to collect. Ask Ann Summers, a Boston nurse. In October 1987, Summers explained to the judge in Boston small-claims court that she hired a dating service because one of its employees said that for $850 the company would find her a date a month -- a promise that did not appear in any contract. But in six months, the service turned up only one date. The judge ordered the dating service to pay Summers $650. Yet the nurse had to make three collection efforts to get her money, including hiring a court constable for $22. The check finally arrived in March 1988. ''I didn't let anyone discourage me,'' Summers says. And that -- in one sentence -- sums up the drive you need to get your money back.

BOX: Help

These publications provide useful advice, names and telephone numbers for anyone trying to get money back:

Consumer's Resource Handbook (write to the Consumer Information Center, Pueblo, Colo. 81009; free)

Everybody's Guide to Small Claims Court by Ralph Warner (Nolo Press, 950 Parker St., Berkeley, Calif. 94710; $14.95)

Small Claims Court: A Users' Guide (HALT, Membership Services Department, 1319 F St. N.W., Suite 300, Washington, D.C. 20004; $6.95 plus an annual $15 membership fee)