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Top Ten Consumer Complaints

The Division gave the following list of top consumer scams for its FY2008 Annual Report.

1. E-Commerce/Internet Offers:  Deceptive practices conducted over the Internet continue to dominate the types of scams that the division sees. These complaints represent 27% of the top ten complaints. Con artists are able to use the Internet to exploit the consumer's vulnerability. There are several reasons for this vulnerability. The pitch is made in the privacy of the consumer’s home where the consumer is less guarded. Consumers tend to believe what they read. The method of payment is quick and easy. Finally, consumers have little recourse if they find themselves victims of deceptive practices. Some of the more common tactics used are the unauthorized debiting of a consumer’s bank account, the automatic billing of a monthly fee until notice of cancellation is received (negative option), and the failure to provide a three-day right of rescission.
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2. Coaching Services:  When a consumer purchases a business opportunity, it is not uncommon for the seller or one of its associates to follow up and offer the purchaser coaching services to make the business opportunity more profitable. These services tend to cost many thousands of dollars more than the purchase of the original business opportunity. Some of the deceptive practices common to this type of complaint are the misrepresentation of potential earnings and the qualifications or experience of their coaches. They often encourage consumers to contract for services that the consumers cannot benefit from.
    
3. Retail Sales:  The deceptive practices that are common to this category of complaints include the failure to deliver products in the time represented, the failure to make refunds when required, the failure to disclose refund policies, and the failure to honor warranties.
    
4. Health Spas:  The bad economy during the year caused many health spas to close their doors. The closures have resulted in refunds becoming due to members.
    
5. Alarm Systems:  Alarm system companies usually sell their products by going door-to-door where aggressive sales tactics are used. In many instances, the company sells a new service as if it were an upgrade to an existing service resulting in the consumer being obligated to pay on two separate contracts.
    
6. Personal Services:  Personal services are those economic services involving the personal effort of an individual as opposed to the salable product of the person's skill.  The services of moving companies are an example.  A deceptive practice occurs when the company gives a low bid to persuade the consumer to agree to buy the company's services with the company knowing that it will not honor the agreed price, but will demand a higher price once the contract is partially or fully performed.
    
7. Home Improvement/Repair:  The deceptive practices include the failure of the contractor to provide the service after receiving the consumer's deposit, the failure of the contactor to honor its warranties, the misrepresentation of the work of another as being the work of the contractor, and the refusal by the contractor to continue working until the consumer agreed to a higher price.
    
8. Debt Collection:  The deceptive practices include the debt collector attempting to collect a debt from someone other than the debtor, attempting to collect more than what the debtor owes, or misrepresenting its legal status.
    
9. Auto Repair:  Some of the deceptive practices common to this group are that the repair shop performed unneeded repairs, failed to disclose refund policies, and failed to obtain the consumer’s express authorization for the repairs.
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10. Billing Fraud:  The deceptive practices include the unauthorized charge on the consumer’s credit card and advertising that deceptively presents itself to the consumer as a bill.