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PrintAs the economy headed south last year, consumer complaints about companies and individuals ripping them off headed higher, according to an annual survey of state and local consumer help agencies.
Nearly 60 percent of agencies polled in 18 states said they fielded more complaints in 2009 than the previous year. The average increase was 23 percent.
"When times are hard, consumers are more vulnerable to false promises of easy ways to make or borrow money," said Anna Huddleston-Aycock, president of North American Consumer Protection Investigators, one of the sponsors of the survey.
The Consumer Federation of America offers these 10 tips for avoiding scams:
1. Before you do business with an individual or company, check his or its track record.
2. Hire a licensed professional.
3. Pay with a credit card.
4. Use gift cards and gift certificates promptly.
5. Don't pay in full upfront.
6. Recognize the danger signs of fraud, such as requests to wire money and pressure to act immediately.
7. Get all promises in writing.
8. Seek help for financial problems from legitimate sources.
9. Know your debt collection rights.
10. When in doubt, check it out.
For more details on these tips visit www.consumerfed.org, click "What's new at CFA," click "press releases" and select "Consumer tips to protect against scams and rip-offs."
At the same time that state and local agencies were facing more demand for their services, many saw their resources shrink. Roughly 70 percent of the 28 agencies that responded to a question about budget cuts said they faced reductions in staff or elsewhere last year, up from 47 percent in the 2008 survey.
The survey called the cuts a troubling trend, noting that unlike federal agencies, state and local agencies try to mediate and resolve consumer disputes.
Overall, the fastest-growing consumer complaint involved bogus offers to help people save their homes from foreclosure, probably not a surprising fact given the meltdown in the housing market.
"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, director of consumer protection at the Consumer Federation of America, another survey sponsor.
Many of the top complaints last year were related to credit and debt services, such as credit repair, debt relief, debt collection practices and mortgages. Complaints related to credit and debt rose from No. 3 to No. 2 among the top 10 categories.
The No. 1 complaint category last year involved automobiles, including sales, leasing, faulty repairs, towing disputes and misleading advertising.
Rounding out the top 10 were:
3. Home improvement/construction. (Shoddy work and failure to start or complete the job.)
4. Utilities. (Service or billing disputes.)
5. Retail sales. (Deceptive advertising, defective merchandise, problems with rebates, coupons, gift cards.)
6. Services. (Shoddy work, failure to have required licenses, failure to perform.)
7. Internet sales. (Deceptive practices, failure to deliver purchases.)
8. Household goods. (Failure to deliver, faulty repairs.)
9. (Tie) Home solicitations (door-to-door, telephone or mail) and landlord/tenant issues. (Unsafe conditions, eviction tactics, failure to make repairs or provide promised amenities, deposit and rent disputes.)
10. Health products/services. (Misleading claims, failure to deliver.)
To combat the fastest-growing complaint -- foreclosure rescue scams -- consumers should reject unsolicited offers of help from any company except their own lender, the report said, and seek advice from a local housing counselor by calling 1-800-569-4287.
Doug Oster writes a blog, "Growing With Doug," exclusively at PG+, a members-only web site of the Pittsburgh Post-Gazette. Our introduction to PG+ gives you all the details.
