Economic News

Top consumer complaints tied to areas of economic distress

(8/12/2010) Erate Exclusive - It's not surprising that the types of companies that contributed to the economic downturn remain at the top of consumers' complaints list.

They just don't seem to be able to get their act together, according to "Nation's Top 10 Consumer Complaints" a study of 2010 consumer complaints from 31 consumer agencies in 18 states by the Consumer Federation of America (CFA), the National Association of Consumer Agency Administrators (NACAA), and the North American Consumer Protection Investigators (NACPI).

As in the 2009 survey, complaints about credit and debt were second only to auto-related complaints. Fraud also appeared as a new category in the top ten.

The agencies surveyed received more than 252,000 complaints in total in 2010 and collectively obtained in excess of $208 million in restitution and savings for consumers.

While no single type of complaint stood out as the fastest-growing or absolute top in 2010, many consumer complaints were related to the difficult financial situations that consumers and businesses face, including issues with mortgages, housing and credit, the report said.

Here's a list of the top 2010 complaint categories with their 2009 ranking noted in parenthesis. Some 2010 complaint categories tied for the same position.

The list is a reminder that consumers must be vigilant when purchasing goods and services, especially from those with the highest level of complaints.

1. Auto (1) - Leasing and towing disputes, misrepresentations in advertising or sales of new and used cars, lemons and faulty repairs.

2. Credit/Debt (2) - Mortgage-related fraud, predatory lending, credit repair, debt relief services, illegal or abusive debt collection tactics, billing and fee disputes.

3. Home Improvement/Construction (3) - Shoddy work, failure to start or complete the job.

3. Retail Sales (5) - False advertising, deceptive practices, defective merchandise, rebate problems, coupon issues, gift cards and gift certificates, failure to deliver.

4. Utilities (4) - Service problems or billing disputes with phone, cable, satellite, Internet, electric and gas service.

5. Services (6) - Misrepresentations, shoddy work, failure to have required licenses, failure to perform.

6. Internet Sales (7) - Misrepresentations or other deceptive practice, failure to deliver online purchases.

7. Household Goods (8) - Misrepresentations, failure to deliver, faulty repairs in connection with furniture or appliances.

8. Landlord/Tenant (8) - Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, illegal eviction tactics.

9. Fraud (Not in top 10 last year.) - Bogus sweepstakes and lotteries, work-at-home schemes, and other scams.

10. Home Solicitations (9) - Misrepresentations or failure to deliver in door-to-door, telemarketing or mail solicitations, do-not-call violations.

"Much of what state and local consumer protection agencies do, from preventing rip-offs to mediating individual complaints, goes unheralded" said Susan Grant, CFA Director of Consumer Protection.

"Our survey shines a spotlight on consumers' everyday problems and the vital role that state and local consumer protection agencies play in helping them and making the marketplace safer for all," she added.

The report also found new types of complaints cropping up or increasing, including,

• Auto - Companies offering to buy consumers' cars but don't pay off the liens on the vehicles or the checks bounce.

• Real estate - "Recovery services" falsely promising to retrieve money consumers lost on timeshares.

Also, tax-related scams in the form of official-looking correspondence offering help, for a fee, with property tax adjustments which are often available for free from the property tax jurisdiction.

• Bank, financial accounts - Major data breaches resulting in barrages of complaints from consumers worried about identity theft.

Also billing disputes involving unauthorized debits to consumers' bank accounts spanning many years.





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