Imagine a world where car dealers sell cars that don’t work, apartments are infested with bedbugs, debt collectors threaten disabled people until they pay fees they don’t owe, home repairs don’t get finished, retailers skew ads and grandmothers fall victim to fake lotteries. Welcome home, America!
The Consumer Federation of America released its annual list of the top 10 consumer complaints, which comes from a survey of 38 consumer agencies about the kinds of complaints they received in 2011.
These consumer groups received nearly 290,000 complaints, and were able to recover or save consumers almost $147 million.
Auto, credit and debt, and home improvement problems are at the top of this year’s list of consumer complaints. Surprised? Probably not. The recession did a number on these industries, and then some. Luckily, HLN Money Expert Clark Howard has a few suggestions so you don’t end up as a complainer contributing to that list next year.
The top five fastest-growing complaints in 2011 were about fraud, debt collection abuses, Do Not Call violations, mortgage-related problems and home improvement problems. The top five worst complaints involved mortgage-related problems, home improvement, timeshare sales and resales, Internet sales and fraud. What makes a type of complaint the “worst” is the number of complaints about a particular subject, the amount of money involved, the impact on particularly vulnerable consumers, and the outrageousness of the situation, according to the CFA.
Mortgage and foreclosure problems have become increasingly tricky for consumers over the past five years or so, ever since the housing bubble burst and sent the entire market into a crisis. The aftermath then left a whole lot of homeowners owing more on their mortgages than their homes are worth.
And banks weren’t going to stand by without getting paid, so a lot of them got caught in some shady activity while trying to get money from homeowners behind on their mortgage payments. Robo-signing may ring a bell. A lot of homeowners were unfairly foreclosed on by banks without the proper paperwork. So it’s all coming together now. One thing led to the next, making it clear why consumers would be complaining.
In its report, the CFA included anecdotes from consumers about their experience. Here’s one related to the foreclosure mess:
In another example of mortgage modification madness, a consumer complained to the Louisiana Attorney General’s Office that he tried for eighteen months to work out a loan modification with Bank of America, repeatedly filling out documents and sending them as instructed, only to be told that more was needed. After being notified that his loan modification had been approved and asked to fill out more papers, which he never received, he got a call from the bank telling him that he had in fact been turned down. No explanation was provided, and his home was placed into foreclosure, despite the fact that he had successfully completed the trial payments and had a friend who was prepared to provide financing.
Here’s the full list of the top consumer complaints in 2011:
No. 1 Auto
Mistreatment in the auto industry made it the number one most complained about last year. Consumers shopping for cars or going in for repairs said they were sold lemons, got into leasing disputes, got faulty repairs, and were even duped by false advertising. The report said that nine people in Florida were fooled big time by a seller on Craigslist. Some of them paid without ever seeing a car, while others did get cars, but they barely worked or didn’t have a title. Here’s Clark’s number one rule for the number one most complained about industry: Never buy a car online without seeing it first!
When you start to shop for a car, and it’s used, Clark recommends checking the Carfax report online to find out where it’s been, what it’s been through and what you should expect. Clark also suggests going to a certified, independent mechanic for repairs. It’s usually cheaper than the dealer and they’re usually trustworthy.
No. 2 Credit/Debt
Next on the list is credit and debt. This is the third year in a row people have been complaining over and over about credit card billing and fees, mortgage-related fraud, predatory lending and abusive debt collection tactics. One case related to abusive debt tactics involved a disabled woman in New Jersey who was harassed and threatened until she paid a fee to an ambulance service in full, when she had already agreed to a monthly payment plan for the service. Some of the complaints even included threats about imprisonment.
No. 3 Home Improvement/Construction
Consumers complained that home improvement and construction companies wouldn’t even finish jobs they started and when they did finish, the work was bad. Could you imagine paying a contractor $18,000 to build an addition to your house, and then it never gets built? That happened to a teacher in Florida.
No. 4 Retail Sales
Apparently people are not very happy with retailers’ false advertising and stores that sell defective merchandise. The CFA says one of the biggest problems people complained about was businesses refusing to take promotional gift certificates, or that their terms were unclear.
No. 5 Utilities
Consumers were not happy about billing disputes and service problems with phone, cable, satellite, Internet, electric and gas services. You probably wouldn’t be happy either if a company took it upon itself to go ahead and charge you more for services you didn’t ask for.
No. 6 Services
Consumers complained about a variety of services that involved things like providers lacking necessary licenses or providers who simply just did a bad job. One woman in New Jersey complained that she bought a headstone for her sister's grave and even after two years, it was never delivered. An investigator in the Gloucester County Consumer Protection Office found that the company that made the headstone had never been paid by the memorial company, even though the consumer already paid in full.
No. 7 Internet Sales and Landlord/Tenant
It’s a tie. People complained that Internet retailers misrepresented online purchases or didn’t deliver them. Clark says make sure you check into the reputation of the seller. Don’t just buy from any old website and expect a top notch product to arrive on your doorstep. Make sure you understand the policy on returns and refunds and pay by credit card, not debit card. The credit card provides some insurance in case of fraudulent charges or the seller misbehaves.
Also coming in at number 7 was landlord and tenant problems. Some of the complaints are essentially a renter’s worse nightmare. Renters complained about unhealthy and unsafe living conditions. They also griped about landlords not making repairs, using illegal eviction tactics and failing to return security deposits. And to top it off, more renters last year complained that their apartments were infested with bedbugs and landlords did nothing about it! That has to top the outrageousness factor.
So if you’re unfortunately stuck in that situation, Clark says when it comes to landlord-tenant disputes, you need to get everything in writing. Also, document everything. Take pictures of your apartment when you move in and when you move out. If something’s broken, get it fixed. You want to be in the best position to protect yourself against unfair treatment by any landlord.
No. 8 Fraud
Consumers complained about all sorts of scams like fake checks, fake sweepstakes and lotteries and grant offers.
One scam in the report was investigated in Kansas, North Carolina and Minnesota. A group promised consumers a $25,000 grant from the U.S. government if they purchased expensive books and coaching services, which of course did not happen.
No. 9 Real Estate
A newbie to the top 10 list this year. Consumers complained about real estate fraud, retirement and assisted living facilities and timeshare sales. If you’re a devoted Clark follower, you already know the timeshare business is a risky one! Timeshares are almost impossible to get rid of these days, and if someone promises you they can sell it for you, don’t believe them. Look into the offer before paying anyone anything.
No. 10 Household Goods and Home Solicitations
When it came to household goods, consumers complained most about faulty furniture or appliance repairs and sellers’ failure to deliver. Clark always recommends using a credit card when you buy furniture so you have some type of insurance in case the store goes out of business or you’re mistreated.
Regarding home solicitations, consumers said telemarketers and mail solicitations misrepresented or failed to deliver services. Consumers also complained about violations of do-not-call rules.