False advertising, shoddy construction work, and fraud medical services are on this year’s list of top consumer complaints, according to a new report by the Consumer Federation of America (CFA).
The annually published report — which is a collection of more than 1.4 million complaints from 35 state and local consumer agencies across 21 U.S. states — identified the most common, fastest-growing and newest type of complaints brought forward by consumers last year. This year, it has helped consumers recover or save more than $107 million.
“These state and local agencies are the first line of defense for consumers, righting individual wrongs, stopping abusive practices in the marketplace and recouping people’s money or saving them from paying unjust charges,” CFA Director of Consumer Protection and Privacy Susan Grant said on a conference call.
Similar to previous years, autos and home improvement and/or construction were the top two categories that consumers complained about. These included misrepresentations in advertising or sales of new and used cars, auto leasing issues, or with respect to construction, shoddy work or failure to start or complete the job.
“These problems often involve significant amounts of money and cause a great inconvenience,” the report explained. Hence “consumers are more likely to report them and seek help.”
Other complaints involved problems with retail sales — such as false advertising or deceptive practices — as well as problems with landlords or tenants.
Complaints about fraud, medical billing problems, and retail sales were also on the rise, the report said, and they ranked as the top 3 fastest-growing categories that consumers complained about.
For example, a young woman burdened with student loans in Montana was described as being preyed upon a fraud organization that used high-pressure sales tactics. She had ended up signing for its student loan forgiveness program but had “misgivings” and contacted the local agency, who sorted the issue out — and determined the program to be fraudulent — and refunded her $10,500.
Fresh new horror stories
While complaints about autos and home improvement and construction continue to rank high on the list, several interesting new consumer issues have surfaced putting consumers in tricky — and sometimes dangerous — situations, the report revealed.
One situation involved a Maryland business that offered help to families that were looking for surrogates to give birth to their children. According to the report, they charged a “significant fee” to customers, and were later asked to pay additional fees that would be placed in escrow accounts for the surrogates.
But they didn’t provide any proof of those accounts and also failed to provide the services it promised. The Maryland state agency eventually obtained a cease and desist letter and is trying to get refunds for those defrauded customers.
Another situation they described was when a New Mexico woman had fallen victim to a “romance scam” and had sent thousands of dollars to a man she had met online. The man had cast himself as an Army general, which appealed to her, since her deceased husband had been a high-ranking military officer. Her friend had referred her to the state’s agency, worried about her, and she was even briefed on how romance scams work by an investigator. But she ignored his advice.
She eventually sent even more money and over time and by the time she went back to the state agency, she had lost her home and all of her money. She ended up in a mental health facility and it was “impossible to retrieve any of her money and she ultimately moved in with her friend,” the report noted.
Aarthi is a writer for Yahoo Finance. Follow her on Twitter @aarthiswami.