March 6, 2013

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Article

Top 10 Consumer Complaints and Scams Released

Press Release

March 6, 2013

At the state level, the Division of Consumer Protection saw the number one complaint about coaching services represent 26 percent of total complaints received by the division.

“Coaching services offering big profit promises remain an attractive pitch for consumers who end up losing thousands of dollars while chasing an offer that never delivers,“ said Traci Gundersen, division director.

The top ten consumer complaints are as follows:

  1. Coaching services:  Coaching services are offered to purchasers of business opportunities. These services tend to cost many thousands of dollars more than 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 the coaches. These companies often obligate consumers for services from which they will receive little if any benefit.
  2. Deposits/refunds: The deceptive practices that are common to this category of complaints include the failure to make refunds when required and the failure to disclose refund policies.
  3. Retail sales: The deceptive practices that are common to this category of complaints include the failure to deliver products during the time frame represented (or if no time frame is represented, within 30 days); providing a product or service that is only similar to the product or service purchased but does not have the same qualities, or is of a different model or type of product or service and to failing to honor warranties; 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. E-commerce/internet offers: Deceptive practices conducted over the internet continue to dominate the types of scams that the division receives. Con artists are able to use the Internet to exploit the consumer’s vulnerability. There are several reasons for this. 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 any applicable right of rescission.
  5. Model/talent/acting offers: Consumers are led to believe that their child is special and would make a great actor. The victim’s love of their children coupled with the flattery being presented to the victim by the con artist make this type of scam easy to work. Consumers are pressured into purchasing costly classes and enter into contracts where fees are paid to the agency before any work is secured for the client.
  6. Telemarketing: Scams involve telemarketers making misrepresentations to get consumers to sign up for a product or service.
  7. Personal services: Complaints reflect scams involving lawn care, television subscriber services, etc.
  8. Alarm systems: Alarm systems are often sold door-to-door with aggressive sales tactics. 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.
  9. Auto repairs/sales: Repairs: Failure to disclose refund policies, failure to obtain consumer’s express authorization prior to repair, unnecessary repairs.  Sales: Misrepresentations in advertising or sales, aggressive sales practices, contracts with incapacitated or vulnerable purchaser.
  10. 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 contractor 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 agrees to a higher price.
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