I have a problem with the dealer in my area. I feel that they are cheating numerous volvo car owners. The other day I went in to get my car serviced. I had just had my car serviced in Feb at another dealer and they had told me that I had 65% of my front brake pads left. After putting around 5,500 miles on it since then, the dealer that I took it to yesterday told me that I had 8% left and needed new pads and rotors due to blueing.

Knowing me, I had two of my friends look at it at seperate times and both told me that I had over 50% left. Then an independant volvo service place told me the same thing.

What is the next step? how do we keep dealers from SCREWING us?

You can have 5 people look at brake pads and most will have different opinions as to just how long (or what "percentage") of pad material is really left. It's not just a "dealer" thing, in your case it's just ONE guy at that dealership who might want to sell you pads pre-maturely or is a new guy who lacks experience to know better AND guys like that are working EVERYWHERE in the car business, not just at some dealers. They're at Midas, CarX, Sears, Firestone, Goodyear and independants too.
Volvo dealers now have access to a new tool (supplied by Volvo) which is placed next to the pads and will properly determine the pads real thickness for those "techs" who might mis-judge that. Our shop has ordered that tool as we too have a few young guys who lack the experience to know (apparently).
Me? I've been in the business for many years so when I see pads that are less than 1/8" thick (which I'd say is about 15% thick), I then mention it as some customers will burn through that in about 2 weeks to a month depending on how they drive, etc.

Don't trust him, stay informed, ask for second opinion. Knowledge is power.
Good luck

Document what you just said, then file a complaint with the local BBB. Send a copy of that to the dealer's General Manager (not service manager) and to the local area Volvo rep.