Kara McGuire: Consumer scams adapt to changing timesBilling disputes. Shoddy repairs. Outfits that promise to fix credit woes or stop houses veering toward foreclosure, but then take your money and disappear. The Consumer Federation of America recently put out its annual list of the top consumer complaints collected by state agencies and consumer groups.
Billing disputes. Shoddy repairs. Outfits that promise to fix credit woes or stop houses veering toward foreclosure, but then take your money and disappear. The Consumer Federation of America recently put out its annual list of the top consumer complaints collected by state agencies and consumer groups.
At the top of the list? Complaints relating to the purchase or servicing of automobiles, followed by complaints involving credit or debt problems and ones dealing with home improvement projects.
The fastest-growing area of complaints, according to the Consumer Federation? Foreclosure-rescue scams. In most cases, these scams occur when bad actors claim they can save your home from foreclosure for an upfront fee, but then fail to deliver on that promise.
In the Minnesota attorney general’s office, for example, complaints are up, especially in the area of what Attorney General Lori Swanson calls “economic-related fraud — both companies promising to help people get out of trouble as well as companies who are putting people further into trouble by marketing services that aren’t in people’s best interest.” Examples include foreclosure assistance, credit repair, tax-assistance scams and loan modification problems.
Rochelle Barnhart, spokeswoman for the Minnesota Department of Commerce, said complaints relating to discount health plans that don’t pay for much are up, as are complaints dealing with debt collection issues. Meanwhile, complaints related to insurance are down.
Automobile purchases always make the Better Business Bureau of Minnesota and North Dakota’s top 10 complaints list, BBB vice president Barb Grieman said. The group also receives a high volume of complaints relating to home improvements such as new roofing and siding, window installation and home remodeling. “They’re usually big repairs or big purchases, and people tend to come to us for that sort of thing,” she said.
Swanson said she is also wary of a new type of business: the forensic loan audit industry. These companies charge fees for combing through your loan in search of Truth in Lending Act violations, claiming you can use violations to help modify your loan.
For Grieman of the BBB, some of the most concerning issues facing consumers are in areas that don’t make the group’s top 10 list. Tough economic times bring the scammers out in full force. And because people tend to be more desperate when unemployment is high and credit is tight, more people fall victim to their pitches. She shared heartbreaking stories about people who lost thousands because they were convinced that if they wired money they really would receive winnings from a foreign lottery. Or the grandmother who was scammed by a person pretending to be someone’s grandson in need of emergency cash. Or the unemployed worker that answered the bogus ad to be a mystery shopper.
“When people need to believe in something, they will,” she said.
As always, read the fine print. If something sounds too good to be true (say it in unison), it probably is. Never pay upfront in full for a service. Check out a company before you do business. And hope you have elected officials who are looking out for your best interests.
Kara McGuire writes about personal finance for McClatchy Newspapers. Write to her at firstname.lastname@example.org or follow her on Twitter at Twitter @kablog.