Scams taking advantage of the federal Affordable Care Act, door-to-door meat sales from the backs of trucks and businesses closing because of overwhelming responses to discount coupons offered on social media were among the newest types of consumer complaints fielded by consumer protection agencies last year, according to a survey from the Consumer Federation of America.
The annual report from the Washington, D.C.-based association of nonprofit consumer groups, which includes a top 10 list of complaints, offers a snapshot of common ways people say they are being ripped off.
The survey also seeks to highlight the role of state and local consumer agencies in protecting the public, many of which have been scaling back or in some cases shutting down because of budget cuts, the federation said.
The 40 agencies in 20 states that participated in this year's survey received some 360,000 complaints in 2012 and saved or recovered some $98 million for consumers, the federation said. It noted that unlike most federal agencies, state and local consumer agencies often mediate individual complaints.
In the case of the Affordable Care Act, a senior citizen in California reported being tricked into providing her Social Security number and medical information by a caller pretending to be from the federal government and to be checking her eligibility for the new health care program. Another scam involved telemarketers selling low-quality health insurance and misrepresenting it as part of health care overhaul.
In San Francisco, the district attorney's consumer protection unit noticed restaurants, spas and personal services struggling to honor discounts offered on social media when too many people responded. In some cases, the onslaught forced businesses to close to stem losses, leaving customers holding worthless coupons.
Other types of complaints agencies reported as new last year included prepayments for health clubs that never opened, rent payments being stolen from drop-boxes at apartment complexes and mobile home parks, and an offer for a payday loan that turned out to be a line of credit to spend at an online shopping mall with an annual percentage rate of 1,000 percent.
Some trends that stood out were the persistence of complaints related to a struggling economy such as foreclosures and landlords skimping on the heat, and the "boundless creativity" of scammers to find new ways to fleece consumers, the federation's director of consumer protection, Susan Grant, said in a conference call with reporters Wednesday.
She also cited a growing trend of thieves exploiting cash reload cards designed for loading funds onto prepaid cards. In a typical scenario, the scammer cons someone into paying for something in a hurry by providing the serial number from the reload card. The information is then used to move the money onto a prepaid card, which is cashed out at an ATM.
The top 10 complaints in 2012 were the same categories cited in 2011 and in previous reports, although in some cases the order changed.
The No. 1 type of complaint last year and in past years involved vehicles, including sales, leasing, faulty repairs, lemons, towing disputes and misleading advertising.
In the case of used cars, consumer protection agencies recommend people have the vehicles checked out by a trusted mechanic before buying and get a previous history report, including information about the title, whether the odometer mileage is accurate and whether the car was previously declared a total loss. Approved companies that sell car histories are available at www.vehiclehistory.gov.
The agencies surveyed gave numerous suggestions for better protecting consumers, including requiring online businesses to have customer service numbers with live personnel to make it easier for consumers and agencies to resolve complaints, and amending the federal Used Car Rule to prohibit or limit "as is" sales to protect consumers and the interests of honest dealers who are at a competitive disadvantage when they sell used cars at higher prices with warranties.
Other ideas included prohibiting mandatory arbitration clauses in consumer contracts, requiring telemarketers to keep recordings of entire calls and requiring credit bureaus to include free credit scores when consumers request their federally mandated free annual credit reports.
For the federation's full 62-page report, which includes a section on how consumers can help protect themselves, visit www.consumerfed.org.
In Pennsylvania, the attorney general's bureau of consumer protection takes complaints at 1-800-441-2555. For the bureau's Pittsburgh regional office try 412-565-5135.
Patricia Sabatini: firstname.lastname@example.org or 412-263-3066.