Financial woes overshadow list of top 10 consumer complaints

A nationwide survey of consumer complaints underscores the destructive effects of the Great Recession, with an increase in complaints related to credit and debt services -- and especially fraudulent offers to help homeowners avoid foreclosure reflected in a just-released Top 10 list.

The 2009 Consumer Complaint Survey Report was conducted by the Consumer Federation of America (CFA) , the National Association of Consumer Agency Administrators (NACAA) and the North American Consumer Protection Investigators (NACPI).

The 15th annual report, which surveyed 33 state, county, and city agencies from 18 states across America over a one-year period, found:

• More than half of the agencies reported receiving more complaints in 2009 than they did in 2008.
• Consumer complaints about credit and debt rose from #3 to #2 in the top ten.
• The fastest-growing complaints in 2009 concerned bogus offers to help save homeowners from foreclosure.
• Of the 28 agencies that responded to questions about budget cuts, 71% experienced cuts last year, compared to 47% in 2008.
• The agencies surveyed received more than 300,000 individual complaints and managed to collect nearly $110 million in restitution or savings for consumers.

"Consumers who are desperately trying to fend off collection agencies or save their homes from foreclosure are prey to scammers who offer to help them and then take their money and run," said Susan Grant, CFA Director of Consumer Protection, in a statement. "Despite layoffs, hiring freezes, and furloughs, state and local consumer agencies are making Herculean efforts to keep up with these and other complaints."

Besides bogus offers to help homeowners avoid foreclosure, recession-related complaints included aggressive debt collection practices, debt settlement and other types of debt relief services, advance fee loans, business opportunities, business closings, landlord/tenant problems resulting from foreclosures, job scams, investment schemes, and auto dealers failing to pay off loans on trade-ins.

"When times are hard, consumers are more vulnerable to false promises of easy ways to make or borrow money," said Anna Huddleston-Aycock, a Justice Analyst with the Pinellas County Department of Justice and Consumer Services in Florida and current President of NACPI, in a statement.

The survey report provides real-life examples of complaints from state and local agencies' files along with tips on how consumers can protect themselves in those situations. It also describes the biggest challenges that state and local agencies faced last year and their biggest achievements.

Besides ranking the most common consumer complaints, the report also offers 10 tips on protecting yourself from scams and rip-offs.

Below are the top ten consumer complaints for 2009, with their 2008 rankings noted in parenthesis:

1. Automobiles (1) Misrepresentations in advertising or sales of new and used cars; lemons; faulty repairs; leasing and towing disputes.
2. Credit/Debt: (3) Billing and fee disputes; mortgage-related fraud; credit repair; debt relief services; predatory lending; illegal or abusive debt collection tactics.
3. Home Improvement/Construction: (2) Shoddy work; failure to start or complete the job.
4. Utilities: (4) Service problems or billing disputes with phone, cable, satellite, Internet, electric and gas services.
5. Retail Sales: (5) False advertising and other deceptive practices; defective merchandise; problems with rebates, coupons, gift cards and gift certificates; failure to deliver.
6. Services: (6) Misrepresentations; shoddy work; failure to have required licenses; failure to perform.
7. Internet Sales: (9) Misrepresentations or other deceptive practice; failure to deliver online purchases.
8. Household Goods: (7) misrepresentations; failure to deliver; faulty repairs in connection with furniture or appliances.
9. A tie between Landlord/Tenant and Home Solicitations: Landlord/Tenant: (8) Unhealthy or unsafe conditions; failure to make repairs or provide promised amenities; deposit and rent disputes; illegal eviction tactics. Home Solicitations: (9) Misrepresentations or failure to deliver in door-to-door, telemarketing or mail solicitations; do-not-call violations.
10. Health Products/Services: (10) misleading claims; unlicensed practitioners; failure to deliver.