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Complaints about group coupons appear to be on the rise

As group coupon purveyors grow in popularity on the Internet and granddaddy Groupon prepares to go public, consumer complaints about these types of daily-discount offers are also on the rise, a new survey suggests.

Complaints about group coupons, which typically are activated when a certain number of people sign up, were among a handful of new types of complaints encountered by state and local consumer protection bureaus last year, according to a survey of 31 agencies in 18 states by the Consumer Federation of America.

Complaints generally involved misleading or unclear terms, the federation said.

In one reported case, a consumer who purchased a coupon for a discounted 90-day pass to a fitness club said that because terms printed on the coupon were unclear, she mistakenly believed that as long as she started using it before the expiration date, it would be good for a full 90 days. Instead, the coupon was not valid past the expiration date.

A local consumer agency was able to help get the $119 purchase price refunded, the CFA said.

Consumers who believe that coupon disclosures aren't adequate and who can't resolve their issues alone should contact their state or local consumer protection agency, the consumer group said.

Other new types of complaints cited in the survey involved medical billing, wireless television services and car-buying companies.

Problems with time-share resale recovery services also emerged in the new-complaint category in 2010.

"Companies that promise to resell consumers' time-shares have long been a problem. Now, another kind of complaint involves recovery services," which offer to get consumers' money back from time-share resellers who haven't done their job, said Susan Grant, CFA's director of consumer protection.

Overall, the top category for consumer complaints last year involved automobiles, which also was No. 1 the previous year. Complaints included misleading advertising, faulty repairs and sales, leasing and towing disputes.

Complaints about credit and debt services came in second. Problems included billing and fee disputes, mortgage-related fraud, credit repair, debt-relief services, predatory lending and illegal or abusive debt collection tactics.

Retailers tied for third with home-improvement and construction firms in frequency of complaints.

Complaints about utilities, such as service problems or billing disputes, ranked fourth, followed by services at No. 5.

Rounding out the top 10 were Internet sales, household goods, landlord/tenant disputes, fraud (bogus sweepstakes and lotteries, work-at-home schemes and other scams) and home solicitations, including failure to deliver and do-not-call violations.

Protect yourself

The Consumer Federation of America says the best way to avoid a scam or ripoff is to do some homework. Here are some tips for protecting yourself:

Before buying from unfamiliar companies, check with state or local consumer agencies, the Better Business Bureau and online complaint forums to see if other people have reported serious problems.

Pay with a credit card so you can dispute the charges if you don't get what you were promised.

Use gift cards, gift certificates and coupons promptly. Even established businesses can go belly-up, leaving you with worthless vouchers.

Recognize the danger signs of fraud, such as requests to wire money, pressure to act immediately, promises that you can win or make money easily if you pay a fee in advance and offers to recover money that you've lost to scammers, for a fee.

Get all promises in writing. Oral agreements are hard to prove.

If you aren't sure what your rights are or you think that something sounds fishy, ask your state or local consumer agency for advice.

Complaints about group coupons appear to be on the rise 08/03/11 [Last modified: Wednesday, August 3, 2011 10:13pm]
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