On a regular basis, the Consumer Federation of America, in cooperation with the National Association of Consumer Agency Administrators and the North American Consumer Protection Investigators, publish a report on the state of consumer protection and consumer experience in America. This report includes the Top Ten Consumer Complaints, based on surveys of 33 state, county, and city agencies in 18 states.
The report concludes that state a local government agencies are at the front line of consumer protection. “State and local agencies are vital components of the consumer protection system in the United States. The issues they deal with run the gamut from sleazy auto sales to shoddy home improvement work, bare-knuckled debt collection tactics to bogus health products and services, fraud on the Internet to gouging at the gas pump.”
Unfortunately, despite consumers’ increasing need for protection, services have continued to drop. According to the survey, concerns over budget cuts are widespread. Declining revenues from sales taxes, property taxes, and other sources, result in tighter budgets for the agencies and ever-shrinking available services to mediate consumer complaints.”71 percent reported that they experienced cuts just prior to or during the survey period, compared to 47 in our previous report,” the groups say.
Apparently, the trend that was reported in the last survey continues: complaints went up at many agencies in 2009 and the resources available to help consumers went down. This is a list of the top ten worst-rated categories based on consumer reports. They are ranked in order of the amount of complaints they received.
Misrepresentations in advertising or sales of new and used cars; lemons; faulty repairs; leasing and towing disputes
Cash for Clunkers and Chrysler’s bankruptcy ensured that auto industry complaints topped this year’s list. Dealers exploited the Cash for Clunkers program by having customers sign “Contingency Agreements,” guaranteeing that the customers would have to pay the $4,500 rebate if the federal government failed to do so. Several dealers also refused to give customers their cars before the government approved the sales. Chrysler’s bankruptcy caused concern among car owners, fearing that the “new” company would not honor refunds or exchanges for poorly performing vehicles. Although arguably not the company’s fault, that didn’t stop the complaints.
Billing and fee disputes; mortgage-related fraud; credit repair; debt relief services; predatory lending; illegal or abusive debt collection tactics
With the recession underway last year, it is not surprising that credit and debt complaints were the fastest growing category. Hundreds of complaints were issued by consumers against a Georgia-based law firm for harassment, breach of confidentiality, and collection of misattributed debts. Foreclosure rescue scams were also a huge problem, resulting in a federal effort aimed at reversing the trend called “Operation Loan Lies.” One company deceived many customers by offering to help obtain loans – billing them $1,800 for the service. After charging desperate customers, the company did nothing to help them secure financing.