February 18, 2008

LANSING - Michigan Attorney General Mike Cox today announced the top ten consumer complaint categories for 2007. The complaint categories are compiled from over 20,000 written complaints and inquiries received by the Attorney General's Consumer Protection Division. In addition to written complaints and inquiries, Cox's Consumer Protection Division fielded about 85,700 consumer calls in 2007.

The top 10 complaint categories are as follows:

1. Credit and Financial Concerns : Includes disputes about credit reports, collections, billing and finance charges, misrepresenting the terms of credit, predatory lending, and identity theft complaints.
2. Telecommunications and Cable or Satellite TV : Rising from its number three spot in 2006 due to increased complaints about cable/satellite TV services, this category also includes telemarketing, do-not-call violations, cell phone issues, cramming (unauthorized charges), slamming (unauthorized switch of a service provider), and identity theft complaints.
3. Internet: This category includes Internet purchases and auctions, failure to deliver or refund, fraudulent e-mail solicitations, Internet service provider complaints, and identity theft complaints. Computer security experts say 2007 was another year that saw a spike in junk e-mail and sophisticated online attacks from increasingly organized cyber crooks.
4. Retail: Includes problems with the quality of merchandise, rebates, and scanner or pricing errors.
5. Motor Vehicle or Automobile : Rising from its number seven spot last year, this category includes lemon law, advertising, warranty, quality, and misrepresentation complaints.
6. Gasoline/Fuel/Energy: Rising from its number eight position in 2006, this category includes allegations of businesses charging a price grossly in excess of competitors, complaints of high utility rates, billing errors, and contract misrepresentations.
7. Mail Order : Falling from its number five position in 2006, this category includes failure to deliver merchandise, unsolicited merchandise, contest deceptions, and failure to refund complaints. Lottery scams are included in this category and hit seniors particularly hard. The lottery scam often begins with a telephone call from a stranger who excitedly reports of a large cash prize contingent on the payment of taxes or fees. The victim sends the money but the winnings never arrive.
8. Multilevel Marketing (MLM)/Business Opportunities : A struggling economy has a record number of people looking for alternative avenues of income and disappointments related to these "opportunities" cause this category to break into the top ten for the first time. MLMs are multilevel or "network" marketing plans, a way of selling goods or services through distributors. Some multilevel marketing plans are illegal pyramid schemes in which commissions are based on the number of distributors recruited.
   Business opportunities involve the "sale or lease of any products, equipment, supplies, or services for the purpose of enabling the purchaser to start a business." Fraud is most often associated with vending machine, display rack, pay phone, medical billing, work-at-home, and some Internet-related business opportunities -- generally advertising that you will make a lot of money for very little effort.
9. Small Business Providers : This category includes complaints by small businesses receiving unauthorized services or goods, including advertising and directory publications, unsolicited faxes, and leases for business equipment that cannot be cancelled.
10. Personal Service Providers : This category includes complaints about failure to refund, failure to cancel a contract, and failure to deliver services.

In 2007, the Consumer Protection Division obtained more than $3.2 million in consumer refunds and forgiven debts. Additionally, the Consumer Protection Division recovered more than $1.7 million for the State. Since Cox took office in 2003, Consumer Protection has recovered over $18.7 million in consumer refunds and forgiven debts and over $26.6 million for the State.

Attorney General Cox added, "As part of my commitment to Consumer Protection, I strongly emphasize education, because according to a recent FTC survey, 13.5 percent of the adult population fall victim to fraud annually. Education is the best way to prevent that fraud. In 2007, my staff gave about 100 consumer education seminars. Moreover, the Senior Protection Brigade - seniors trained to educate their peers - conducted over 120 identity theft seminars."

Other consumer education efforts include publishing consumer alerts. In 2007, Cox's Consumer Protection staff published 17 consumer alerts to help consumers recognize rip-offs, smell scams, find frauds, and protect their personal financial information. Consumer alerts can be found at www.michigan.gov/consumeralerts .

As we move into 2008, consumers are encouraged to review their New-Year resolutions. Five resolutions that would serve all consumers well include:

1. Safeguard your personal information . Never give out your credit card, bank account, driver's license, or Social Security numbers to someone who contacts you by phone or e-mail. You can further safeguard your information by excluding your name from nationwide consumer credit reporting company list for pre-approved, unsolicited credit and insurance offers by calling 1-888-5OPTOUT (1-888-5678-8688) or online at www.optoutsprescreen.com .
2. You did not win anything! Never send money to collect prizes - legitimate sweepstakes and lotteries never require winners to pay any money in advance to claim awards. If you receive a check - including a certified or cashier's check - or money order and are instructed to deposit the "winnings" or "commissions," then withdraw a portion from the bank and forward the money, do not do it! The check you received will bounce, and you will be responsible to pay back the bank.
3. Order your free credit reports . Michiganders should regularly review their credit reports and bank and credit card statements to detect fraudulent charges or accounts. Consumers ordering reports as a preventative measure against identity theft should consider stagger their requests so that they receive a free report from one of the three credit reporting agencies every four months. Consumers can obtain an annual free credit report from each of the three credit reporting agencies (Equifax, Experian, and TransUnion) at www.annualcreditreport.com or by calling toll-free 1-877-322-8228.
4. Get everything in writing . Always insist that the contract language matches what the advertisement or salesperson said. Remember that most contracts do NOT have three-day cancellation provisions.
5. Do not fall for the "one day only" offer . Avoid pitches that require you to act now or lose the opportunity forever. Take the time to check things out and talk with family and friends.

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