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July 28, 2010, 12:01 a.m. EDT
Car sales top list of consumer complaints
Foreclosure scams are fastest-growing gripe, new survey finds
By Jennifer Waters, MarketWatch
CHICAGO (MarketWatch) -- In a sign of the economic times, consumers' biggest gripes were about car sales and credit and debt grievances, according to a survey of complaints made to consumer agencies last year. The fastest-growing gripe was about bogus offers to save consumers from foreclosure.
Complaints to state and local consumer agencies rose in 2009 at the same time that those agencies saw their staffing levels and resources fall, according to the latest survey conducted by the Consumer Federation of America, the National Association of Consumer Agency Administrators and the North American Consumer Protection Investigators.
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"It's clear from the nation's economic woes that consumers and consumer agencies were hit hard last year," Susan Grant, CFA's consumer protection director, said on a conference call Tuesday.
The groups polled 33 city, county and state agencies in 18 states over a one-year period that ended in December. More than 300,000 complaints were logged and the agencies cumulatively retrieved nearly $110 million in restitution and savings for consumers.
More than half the agencies said they received more complaints in 2009 than in 2008.
Those numbers, however, do not include the calls, letters and emails those agencies receive from consumers looking for advice on how to resolve issues on their own. The Tennessee Division of Consumer Affairs, for example, booked six times more contacts -- 35,000 -- than actual complaints.
The 2009 results mirror the dire economic straits many consumers faced. Credit and debt issues and phony foreclosure-aid offers moved into the No. 2 position from third place last year as more consumers faced troubles with mortgage-related fraud, debt-relief services, predatory lending and illegal or abusive debt-collection tactics.
In Georgia, the governor's office of consumer affairs charged Dwayne Green, chief executive of Maximus Investment Group, with racketeering and theft after 34 residents alleged that he promised to keep their homes out of foreclosure for fees ranging from $250 to $500, but then did nothing for the homeowners, according to the report. Thirty-three of the homes went into foreclosure.
"Consumers are desperately trying to fend off foreclosure and in many of these offers to help them, [scammers] take their money -- and in some cases, their homes -- and run," Grant said.
The top 10 consumer complaints for 2009 were:
Consumers complained about misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, and towing and leasing disputes.
2. Credit and debt
Complaints of mortgage-related fraud rose, as did complaints of billing and fee disputes, credit-repair and debt-relief services, predatory lending and illegal or abusive debt-collection tactics.
3. Home improvement and construction
This was the second-biggest source of complaints in 2008 but problems decreased as new-home construction and overall home sales dipped. Consumers are still complaining, however, about shoddy work and failure to start or complete a job.
Phone, cable, satellite, Internet, electric and gas services were all cited for service problems or billing disputes.
5. Retail sales
Much like auto sales, consumers objected to false advertising and other deceptive practices as well as defective merchandise, problems with rebates, coupons, gift cards and certificates, and failures in delivering products.
Consumers said companies and individuals misrepresented themselves, did shoddy work or failed to perform at all, and did not have required licenses.
7. Internet sales
Consumers said they encountered misrepresentations or other deceptive practices. They also cited the problem of never receiving delivery of online purchases.
8. Household goods
Companies misrepresented their products, didn't deliver them or made faulty repairs on furniture or appliances, consumers said.
9. Landlord/tenant disputes; complaints about home solicitations
There was a tie for the number of complaints in each of these categories. Tenants reported unhealthy or unsafe conditions, and said that landlords didn't make repairs or keep their promises. Deposit and rent disputes were big, as were illegal eviction tactics.
For home solicitations, consumers were unhappy about misrepresentations or failure-to-deliver problems resulting from door-to-door, telemarketing or mail solicitations. Consumers also reported many do-not-call violations.
10. Health products and services
Consumers griped about misleading claims, unlicensed practitioners or delivery failures.
Jennifer Waters is a MarketWatch reporter, based in Chicago.