Nick Slade

Consumer Complaints in 2008: the Top 10

The National Associaion of Attorneys General released their list of the top 10 sources of consumer complaints for 2008, and the winner is: debt collectors!

No surprise there, after all, what other profession has been the bane of the poor since before Christ? Evil enough that Shakespeare took time to write about one in Venice.

Second place, car salesmen. Horse traders have not been around as long, which may be the reason debt collectors beat them to the glory.

Predatory lending, the scourge of the economy, only reached number 6.

Here is the list:

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Bankruptcy: The Best Argument For a Public Option

A recent study published in the American Journal of Medicine (PDF) reviewing personal bankruptcies found that medical bills contributed to 62.1% of all bankruptcies in 2007; 92% of these debtors had medical debts over $5,000. The rest met criteria for bankruptcy because they had lost significant income due to illness, or mortgaged a home to pay medical bills.

While that is not too suprising, what is interesting is that most medical debtors were well educated, owned homes, and had middle-class occupations. Three quarters had health insurance.

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Consumer Complaints Up, But Resources Are Down

The latest survey of front-line consumer agencies shows that while complaints went up, the resources to help consumers went down. 62% of the agencies reported that they received more complaints in 2008 than in 2007, and 47% of the agencies suffered budget cuts just prior to or during the survey period, with one being eliminated entirely.

Top consumer complaints for 2008, with 2008 ranking in 2007 in parenthesis:

  1. Auto: (1) Misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes
  2. Home Improvement/Construction: (2) Shoddy work, failure to start or complete the job
  3. Credit/Debt Collection: (3) Billing and fee disputes, mortgage-related fraud, credit repair, debt settlement, predatory lending, illegal or abusive collection tactics
  4. Utilities: (5) Service problems, billing disputes with phone, cable, satellite, Internet, electric and gas services
  5. Retail Sales: (4) False advertising, defective merchandise, problems with rebates, coupons, gift cards and gift certificates, nondelivery
  6. Services: (9) Misrepresentations, shoddy work, failure to have required licenses, failure to perform
  7. Household Goods: (6) Major appliances and furniture, problems with nondelivery, misrepresentations, faulty repairs
  8. Landlord/Tenant: (10) Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, illegal eviction tactics
  9. (tie) Internet Sales: (7) Misrepresentations, nondelivery in online purchases; Home Solicitations: (8) Misrepresentations, nondelivery in door-to-door, telemarketing and mail solicitations, do-not-call violations
  10. Health Products and Services: (not in top 10 in 2007) misleading claims, failure to deliver

2008 Consumer Complaint Survey Report | Consumer Federation of America (CFA), National Association of Consumer Agency Administrators (NACAA), and North American Consumer Protection Investigators (NACPI)

Arbitration reform cannot come soon enough

In case you missed it, NPR has a really great story on why we need arbitration reform.

The piece starts out with the story of Jamie Leigh Jones a 20-year-old Halliburton/KBR employee in 2005, who was in Iraq for only four days before she was brutally gang raped by fellow employees. No criminal action was ever taken against the rapist who continued to work for Haliburton, so she is trying to sue in civil court. Haliburton/KBR are arguing that she cannot sue; instead, she must arbitrate.

The article also hit many of the points that Sam, I, and others have raised over and over about the biases against consumers in the arbitration system. While I think arbitration may have it place in busines-to-business transactions, where there is some equality in negotiating power, it has no place in consumer transactions.

Payday lenders are corporate loan sharks

A big part of the payday lending story that somehow does not get much play is the comparison to the loan sharks of the past and the historical animosity towards usury. The Salt Lake Tribune has a good story of the dangers of predatory lending, but even better is that it brings up these points. Best of all though is the title: Least the Mafia only charged 250% interest. Makes one wonder why Rep. Luis Gutierrez (D-IL) is pushing to set the federal limit at 390% for a 2-week loan and 780% for a one week loan.

(photo: Jeff Kubina)

Bank fees, hitting you when you are down

As the government moves to issuing debit cards rather than actual checks in an attempt to save money, banks are adding every conceivable fee to get some of those benefits. Even fees just to get the money. Ever see a free ATM? Call customer service, that’ll be 50 cents. How about overdraft fees of up to $20—even though they could just decline charges for more than what is on the card.

Jobless hit with bank fees on benefits | The Herald News

(photo: Wikimedia Commons)

Produce the note!

Sometimes the court system actually works. The AP has an interesting article on homeowners who are forcing lenders to <gasp> produce the note—the proof the lender issued a mortgage. Apparently some people are having some success in delaying or stopping foreclosure by simply asking whomever is trying to foreclose to produce the original mortgage note. In these days of selling and reselling mortgages paperwork tends to get lost, so how does one prove they have the right to foreclose on anything?

I don’t know how good a strategy this really is and it likely would take a sympathetic judge, but hey it can’t hurt to ask!

Homeowners’ rallying cry: Produce the note | AP

Airbag fraud (Auto Fraud Week)

Failure to replace airbags in rebuilt cars is real and very deadly problem. NPR has a great article on airbag fraud. According to NPR, the National Highway Traffic Safety Administration reviewed 1,446 fatal crashes and found that in 255 of those cases, the air bags had not been replaced after a previous accident. Unknown is exactly how widespread the problem is because it is hard to detect without paying to have the bag physically checked.

If you are buying a used car, I cannot stress strongly enough the need to take it to an experienced auto body  person to have them look at the car to see if it has been in a collision,  sometimes they can  also quickly tell if the bags have been deployed and replaced. If it has been in a collision at all, think twice.

Nick Slade is a consumer rights lawyer, and will be posting at Caveat Emptor until 12.2.2009.

(photo: Wikimedia Commons)

Get your car history from your Uncle Sam? (Auto Fraud Week)

Hopefully in the not-too-distant future you will be able to get all the same information that Carfax sells you for $2.50 from Uncle Sam. I say hopefully because there are a number of forces conspiring to prevent it.

The Anti-Car Theft Act (the Act) of 1992 directed the U.S. Department of Transportation to establish a national information system enabling states and others to access automobile titling information. In 1996, the Act was reauthorized, transferring the responsibility for this system to the the U.S. Department of Justice, but DOJ fought it and delayed things until last March when due to a number of fabulous consumer rights organinizations bringing a lawsuit, a federal judge ordered DOJ to establish the National Motor Vehicle Title Information System (NMVTIS).

While the site is up and running, it is of little value because the States of California, Pennsylvania and New York are blocking the release of their data. Why? Right now the states sell the data to Carfax and others, if they have to give the data to Uncle Sam for free, they will lose out on all that money. (Apparently NY gets about $3 million a year and PA gets about $1 million, you can guess that CA is likely near $5 million) Nothing like putting consumer safety second to some pocket change.

Nick Slade is a consumer rights lawyer, and will be posting at Caveat Emptor until 12.2.2009.

Buying a car on credit (Auto Fraud Week)

For starters, if you are going to buy a car on credit, the best way to start is to go to a credit union and “pre-qualify” for a car loan. In other words, find out what you will be able to afford from someone who is not trying to sell you a car. When you go car shopping, you will have a better idea of your limits. No need to visit the Volvo dealer if you are on a Dodge budget.

When you get to the dealer, negotiate the price of the vehicle first, then the financing. If they want to know what you can afford, tell them the price range that you already determined is what you can afford. Do not tell them what you would like your monthly payment to be.

Which line are you more likely going to fall for?

  • I know you said you could only afford $250 a month, but the number came back at $260. You can do that right? Its like skipping a 3 cups of coffee a month.
  • I know you said you could only afford $10,650, but the number came back at $13,448. You can do that right?

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