The top consumer complaints among Americans last year stay relatively the same, with car, credit and debt complaints topping the list.
An annual report released by the Consumer Federation of America (CFA) and the North American Consumer Protection Investigators (NACPI) shows that while the top complaints remained similar year over year, there are several fast-growing complaint categories. The five fastest-growing complaints are about fraud, debt collection abuses, Do Not Call violations, mortgage-related problems, and home improvement.
Susan Grant, director of consumer protection at CFA, said that the most noteworthy new consumer complaint is tied to prepaid card products.
โScammers are always looking for new ways of getting consumersโ money,โ Grant said on a call Tuesday. โPerps can abuse prepaid card products to get money from consumers quickly and in cash.โ
Prepaid cards are being used like money orders. Scammers are asking consumers to send them money on a prepaid card either to repay a non-existent debt or to cover the costs of a larger money transfer that never comes.
[Credit Score Tool: Get your free credit score and report card from Credit.com]
This category just barely cracked the top 10 after coming in at the seventh spot in 2010. Why the big drop?
โIf you read economic reports, people arenโt buying big-ticket items the way they were before the economic downturn and that may have something to do with it,โ Grant says.
These types of scams include misrepresentations, failure to deliver and faulty repairs in connection with furniture or appliances.
10. Home Solicitation (tie)
This type of consumer complaint doesnโt only involve door-to-door salespeople, the most obvious thought that comes to mind for home solicitations. It also includes telemarketers, mail solicitations and do-not-call violations.
CFA and NACPI also listed some of the worst consumer complaints received last year and do-not-call violations were some of the worst offenders. One ploy cited in the report (and one weโve reported on before) involved scammers calling consumers with offers to lower their interest rates for a fee.
โThese callers are allegedly ignoring state and federal law by calling consumers who are on the Do Not Call Registry and implying that they have a relationship with the consumersโ credit card issuers when they donโt,โ the report said. โSome of the people they call donโt even have credit cards.โ
Lowering your interest rate can be done if you increase your credit score. Check out your credit strengths and weaknesses with a Credit Report Card.
[Free Resource: Check your credit score and report card for free with Credit.com]
9. Real Estate
The only category to crack the top 10 in 2011, but not 2010, real estate consumer complaints were rife with timeshare troubles. Sales tactics like offering large prizes just to sit through a timeshare pitch were mentioned, as well as resale scams. These types of scams involve companies that reach out to current timeshare owners and offer to help them sell their timeshare for a fee. The service is then never rendered.
8. Fraud
One of the more interesting trends in this category is the rise in โaffinity fraud.โ This type of fraud plays off of consumersโ desire to get a sense of who theyโre working with or paying for a service. Scammers will reach out to people with whom they share a commonality, whether it be belonging to the same religion or speaking the same language. This builds a trust that the scammer then betrays.
[Credit Score Tool: Get your free credit score and report card from Credit.com]
7. Internet Sales (tie)
Penny auctions stand out among the pack in this category, with the Georgia Governorโs Office of Consumer Protection reporting a rise in this Internet concept. The auctions are conducted under a pay to play idea, in which consumers pay to bid on an item. One company automatically charged customers $179 in credits to sign up for the site and often would not deliver goods in a timely manner.
7. Landlord/Tenant (tie)
Ever heard of bed bugs? Many tenants and landlords are familiar with these sneaky little creatures that require a lot of effort and money to eliminate from rental units. Several consumer agencies are seeing landlords include clauses in rental agreements that force the tenant to take responsibility of all costs associated with eliminating the apartment of bed bugs. This isnโt illegal in some states, but may violate consumer protection laws in others.
6. Services
This complaint category is about misrepresentations, shoddy work, failure to have required licenses and failure to perform services. While there werenโt any defining trends in this category, agencies reported issues with locksmiths, talent agencies and memorial companies.
[Related Article: How to Get Help If Youโve Been Scammed]
5. Utilities
Cramming remains a problem for many telephone consumers. This method has third-party charges being added onto your regular phone bill. This often goes unnoticed because more and more consumers are receiving their utility bills electronically. CFA and NACPI have some advice for how to avoid cramming:
โIf youโve arranged for auto-payment itโs doubly important to check your bill before payments are made. Cramming charges can be small amounts so you might not notice them if your bill is only a little higher than usual, but these fraudulent charges can really
add up, and you may not be able to recover all of the money you paid if the problem has been going on for a long time.โ
4. Retail Sales
Unsafe products and promotions with lots of catches were some of the highlights of this category. Specifically, dinner deals with extremely short expiration dates or retailers that refused to honor the coupons were a focus for the Vermont Attorney Generalโs Office.
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3. Home Improvement / Construction
Hurricane Katrina may have happened in 2005, but years later Louisiana residents are still feeling the effect.
A construction type called โshoringโ has resulted in many complaints to the Louisiana Attorney Generalโs Office. Consumers pay contractors to lift their house in order to prevent flood damage. In one case, a company went two years without even starting any of the work promised in the contract.
2. Credit / Debt
Seeing as credit and debt are our forte, we were especially interested in this category, which took the second spot on this list in 2010 and 2011.
There were nine different types of consumer complaints highlighted in the CFA and NACPI report, but most notable was the general trend of aggressive debt collection tactics. Consumer agencies in Virginia, New Jersey and Georgia ll reported some extreme cases of debt collection gone wrong. Collectors would use illegal tactics like threatening arrest, refusing to provide proof of the debts, threatening to call employers and garnish their wages, and abusing consumers via phone calls.
If youโve been contacted about a debt you donโt owe or feel youโve been harassed by a debt collector, read our article on how to fight back.
[Credit Score Tool: Get your free credit score and report card from Credit.com]
1. Auto
For the second year in a row, auto complaints topped the list of consumer complaints.
โMore agencies seem to be mentioning online sales of cars than ever before, which makes sense since more people are using the Internet for all kinds of transactions,โ Grant said. โIt can be risky to buy a car online.โ
Image: andjohan, via Flickr
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