WASHINGTON — Consumer protection agencies had to cut staff — and, as a result, help fewer people — in the midst of a recession that's spawned growth in home foreclosure "rescue" scams and complaints about debt collectors, according to a consumer survey released Thursday.
Issues relating to automobile care, home improvement and construction, and credit and debt collection were the top three types of complaints last year, unchanged since the year before.
Landlord and tenant issues jumped from the 10th spot to the eighth, however, and trouble with health products and services, which hadn't appeared on the list in 2007, got the 10th spot on the 2008 Consumer Complaint Survey Report.
The report says that home foreclosure scams, which often target the elderly, were the most serious complaints last year. They were so bad, said Pastor Herrera Jr., the director of the Los Angeles County Department of Consumer Affairs, that loan modification scams could top the list this year.
"People will do whatever they can to save their home," he said. "This is tragic and unconscionable, but it is happening."
Susan Grant, the director of consumer protection for the Consumer Federation of America, the report's main sponsor, agreed.
"These are just outrageous situations," she said. "Just about the worst thing that could happen to somebody is losing their home, and the next worst thing is someone pretending to help them."
The 34 agencies surveyed in the report, compiled by a group of government and private agencies, logged more than 265,000 complaints, and in some cases the numbers jumped substantially.
Georgia's Governor's Office of Consumer Affairs said that its complaints went up nearly 50 percent, and in Orange County, Fla., complaints rose 45 percent.
The rise in complaints comes as consumer agencies are having their own problems. Almost half the agencies surveyed said that their budgets were cut in late 2007 or in 2008. One agency, the Nevada Consumer Affairs Division, was shut down in June.
The report details numerous cases of scams and bad business practices, including that of a Los Angeles County man who came home one day after job hunting to find his 12-year-old daughter crying.
A store owner who'd lent her father money had called earlier and told the daughter that if her father didn't pay his bill immediately the police would take him away to jail. These tactics are illegal.
"State and local consumer agencies were deluged with complaints about debt collectors resorting to harassment and threats," the report says. "Consumers also complained about being contacted for debts that they did not owe and companies that falsely promised to help them with their debt problems."
Other fast-growing complaints were fake-check scams, Internet fraud, bogus loans and discount health care plans.
The agencies suggested new laws to combat these problems, including making it illegal for debt settlement companies to take fees before providing services. They also want to make consumer education mandatory in schools.
Consumer agencies also reported new scams and practices they hadn't seen before, including ridiculously high gas prices and fake SAT test-prep courses.
TOP 10 COMPLAINTS:
These are the complaint categories that appeared most frequently before the consumer agencies:
1. Auto: Misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes.
2. Home improvement/construction: Shoddy work, failure to start or complete the job.
3. Credit/debt collection: Billing and fee disputes, mortgage fraud, credit repair, debt settlement, predatory lending, illegal or abusive collection tactics.
4. Utilities: Service problems, billing disputes with phone, cable, satellite, Internet, electric and gas services.
5. Retail sales: False advertising, defective merchandise, problems with rebates, coupons, gift cards and gift certificates, nondelivery.
6. Services: Misrepresentations, shoddy work, failure to have required licenses, failure to perform.
7. Household goods: Major appliances and furniture, problems with nondelivery, misrepresentations, faulty repairs.
8. Landlord/tenant: Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, illegal eviction tactics.
9. Internet sales: Misrepresentations, nondelivery in online purchases.
9. (tie) Home solicitations: Misrepresentations, nondelivery in door-to-door, telemarketing and mail solicitations, do-not-call violations.
10. Health products and services: Misleading claims, failure to deliver.
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McClatchy Newspapers 2009