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Fastest-growing consumer complaints show one-two punch: recession, scam

The biggest categories of consumer complaints went virtually unchanged in 2008: automobile sales and repair, home improvement scams and shoddy work, credit and debt collection, bogus retail advertising, promises and gift cards. But the fastest-growing source of complaints are scammers who plague consumers drowning in a down economy, preying on their need for quick cash or credit repair, their unemployment, bad debt or mortgage foreclosure, according to a survey of consumer protection agencies in 19 states.

Fastest-growing sources of complaints

. Aggressive debt collection tactics.

. False promises from firms claiming to repair credit, modify loans, settle debts or forestall foreclosure.

. High-cost payday loans and bogus offers for loans with hefty upfront fees.

. Fraudulent work-at-home business opportunities.

. Lost deposits, unused gift cards or undelivered products or services because of a business closure.

. Tenant problems stemming from foreclosed rentals.

Some new tactics

. Telemarketers who learned to mask their name and phone number on caller ID phones.

. Fraudsters sending text messages pretending to be from your bank.

. Crooks who steal personal info by posing as Medicare investigators claiming benefits will be cut off if paperwork is not corrected.

By the numbers

62 percent

Percentage of consumer agencies logging in more complaints

67 percent

Percentage of government consumer agencies working on a smaller budget this year

Word to the wise

"People in foreclosure do whatever they can to stay in their homes but as a last resort part with their last $1,000 on these mortgage repair firms that contact them even though many nonprofits offer the same help for free. People are being tricked out of their homes by these companies here, right now, every day."

Deborah Berry, investigator for the Pinellas County Department of Justice and Consumer Services

Tips

. Can't pay bills? Get advice from a nonprofit credit counseling service or an accountant or lawyer. Learn what debt collectors can and can't do. Get written releases from claims in debt settlements.

. Information and free HUD-approved counseling services on foreclosure can be found at pinellascounty.org/foreclosure and requested from the Pinellas County Department of Justice and Consumer Services at (727) 464-6200.

. For restructuring debt, contact the National Foundation for Credit Counseling for referrals on free or minimal fee advice at toll-free 1-800-388-2227 or nfcc.org.

. If a lender balks at mortgage loan modification, call Hope Now Alliance toll-free at 1-888-995-4673. If you think foreclosure looms, contact Florida Lawyers Saving Homes toll-free at 1-866-607-2187 between 10 a.m. and 4 p.m. Monday through Friday for referral to lawyers working on donated time.

Source: Survey compiled by Consumer Federation of America, National Association of Consumer Protection Administrators and North American Consumer Protection Investigators

Fastest-growing consumer complaints show one-two punch: recession, scam 07/30/09 [Last modified: Friday, July 31, 2009 9:46am]
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