Personal Finance

The Biggest Consumer Complaints of 2011

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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.

“Scammers are always looking for new ways of getting consumers’ money,” Grant said on a call Tuesday. “Perps can abuse prepaid card products to get money from consumers quickly and in cash.”

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.

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Free Credit Check Tool10. Household Goods (tie)

This category just barely cracked the top 10 after coming in at the seventh spot in 2010. Why the big drop?

“If you read economic reports, people aren’t buying big-ticket items the way they were before the economic downturn and that may have something to do with it,” 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 doesn’t 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 we’ve reported on before) involved scammers calling consumers with offers to lower their interest rates for a fee.

“These 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 consumers’ credit card issuers when they don’t,” the report said. “Some of the people they call don’t even have credit cards.”

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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 “affinity fraud.” This type of fraud plays off of consumers’ desire to get a sense of who they’re 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.

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7. Internet Sales (tie)

Penny auctions stand out among the pack in this category, with the Georgia Governor’s 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 isn’t 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 weren’t any defining trends in this category, agencies reported issues with locksmiths, talent agencies and memorial companies.

[Related Article: How to Get Help If You've 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:

“If you’ve arranged for auto-payment it’s 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.”

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 General’s 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 “shoring” has resulted in many complaints to the Louisiana Attorney General’s 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 you’ve been contacted about a debt you don’t owe or feel you’ve been harassed by a debt collector, read our article on how to fight back.

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1. Auto

For the second year in a row, auto complaints topped the list of consumer complaints.

“More 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,” Grant said. “It can be risky to buy a car online.”

Image: andjohan, via Flickr

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