WASHINGTON—In Massachusetts, a man paid $32,000 in cash for a new 2013 Jeep Grand Cherokee Laredo, and so he didn’t understand why he received a car payment bill for $512. He got more worried when the title to the vehicle didn’t arrived and a finance company began calling him about missing payments. Unwittingly, he had signed up for financing even though he had paid for the vehicle in full. He sought help from the Massachusetts Attorney General’s Office; the finance agreement was canceled, and the man received his title plus three years of free oil changes.
This is a real life story among many told in the 2013 Consumer Complaint Survey Report, released July 30.
The category “auto” topped the list of most frequently made consumer complaints, which typically range from “misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes,” states the report. Used-car sales was the third fastest growing complaint last year.
The Consumer Federation of America (CFA) partnering with the North American Consumer Protection Investigators (NACPI) surveyed 40 consumer protection agencies in 23 states that respond to consumers at the city, county, and state levels. Based on the information culled from the agencies that interface with consumers, the report arrived at the most frequent, worst, and fastest growing complaints.
The 40 agencies that provided data for the report received 268,380 complaints last year. The report notes that this number doesn’t include the millions of people who contacted the agencies to receive advice, but did not file a complaint.
The results are not based on a representative, random sample of consumers. Federal agencies were not surveyed, and state and local consumer agencies that focus on just one function, such as insurance or banking, were also not surveyed.
Nonetheless, the information provided by the agencies has validity. As receivers of multiple types of complaints, they are well positioned to see trends in consumer problems. Susan Grant, director of consumer protection at CFA, said in the July 30th teleconference that the agencies consistently rate consumer complaints without much difference, and the kinds of complaints don’t change much over time.
Telemarketing: Fastest Growing
Violations of Do-Not-Call rights and other telemarketing-related abuses topped the list of the fastest growing complaints. Despite the national Do-Not-Call registry, and strict rules for robocalls, which are prerecorded messages, telemarketing abuses persist.
At the moment, telemarketing fraud and abuse is “particularly challenging for state and local consumer protection agencies to deal with, especially when the culprits are overseas,” states the CFA news release.
Grant said that that technology was a major factor in explaining why the consumer agencies’ surveys found it to be the fastest growing complaint.
“Calls placed over the Internet are cheap to make and hard to trace, Caller ID spoofing masks the true identity and location of the callers; prepaid phones are used to make calls anonymously; auto-dialers make it easy to reach millions of potential victims; and crooks use stolen credit card numbers to buy toll-free numbers and other services that they need,” Grant said.
“Consumers need to know that if someone is violating their Do-Not-Call or other telemarketing rights, it’s probably a scam,” said Grant at the teleconference.
“The Federal Trade Commission received about 280,000 complaints per month on Do-Not-Call violations, half of which involve robocalls,” Grant said. Officials at the FTC told her that the number of complaints of violations of Do-Not-Call was steadily rising.
Grant suggested that telephone carriers seek approval from the Federal Communications Commission to block all robo sales calls where it is technically feasible.
Most Complaints
After auto-related complaints, home improvement/construction complaints were the next most frequently mentioned. These complaints involve, “Shoddy work, failure to start or complete the job,” says the report.
The third type of complaint most mentioned was “credit/debt,” which involves, “billing and fee disputes, mortgage modifications and mortgage-related fraud, credit repair, debt relief services, predatory lending, illegal or abusive debt collection tactics.”
The top three type of complaints last year are unchanged from 2012. A new category in this report that didn’t make the top ten in 2012 is called “Fraud,” which involves “bogus sweepstakes and lotteries, work-at-home schemes, grant offers, fake check scams, imposter scams and other common frauds.”
Worst Complaints
The agencies rated the “worst” type of complaints (in terms of money lost, the vulnerability of the victims, and shear “outrageousness”) were the scams perpetrated against the elderly. Grant admits that this category of “worst” complaints is wholly subjective.
The “grandparent scam,” is an example although it doesn’t only target older people. It takes the form of a call or email from a relative or friend who claims to be in an emergency situation and asks that cash be sent immediately.
Grant said, “These con artists will literally take the last dime of an older person’s savings without any qualms whatsoever.”
A case was cited in the report where a Pennsylvania woman in Bucks County received a call from someone who said he was her grandson. He said he was in jail on a DUI charge and needed cash to get out. Her husband withdrew $3,500 from the funeral fund they had at the bank and she was about to wire it to the caller. Fortunately, she also called a local consumer agency that told her the call was likely a scam. She didn’t send the money. Not all scams like this one have a happy ending.
In New Jersey, Gloucester County’s Consumer Protection and Weights and Measures Director Harold Spence said at the teleconference, “One of the things we are seeing … over the past few months is how aggressive the calls are to seniors, and threatening, saying that some of these seniors will be arrested, ‘we are going to come by your homes.’ A lot of these are Microsoft scams, saying they need to tie into your computer.”
According to some consumer agencies, the “tech alert scam” has become the newest or the fastest growing problem last year. In this scam, consumers receive calls from criminals identifying themselves as technicians with a reputable Internet service provider, such as Apple or Microsoft, or a tech repair service, “claiming to have discovered that their computers have been infected with a virus and directing them to a ’repair' website.” When consumers go to the website, malware is downloaded onto their computers, which thereby become infected. “This enables the scammers to steal passwords, account numbers, and other personal information on victims’ computers. Sometimes the scammers demand payment to remove the malware,” states the report.
*Image of man on phone with credit card via Shutterstock
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