March 5, 2009

    LANSING - Attorney General Mike Cox today announced the Top 10 Consumer Complaints of 2008 and warned Michigan consumers about two rapidly growing scams.  The annual list, released during National Consumer Protection Week, is compiled from more than 19,000 written complaints and more than 83,700 consumer calls the Attorney General's Consumer Protection Division received in 2008.

    "Reflecting Michigan's economic crisis, credit and financial concerns were at the top of the list for the seventh year in a row," said Cox.  "My office will continue to defend against consumer scams, and protect the most vulnerable in society."

    Cox warned Michigan consumers of two scams his Consumer Protection Division has identified as becoming more problematic in 2008:  car warranty scams and "debt reduction" scams (more information on both scams at the end of the release).

    In addition to working with consumers to protect them from scams, the Consumer Protection Division recovered more than $11.4 million in consumer refunds and forgiven debts in 2008. 

    To contact the Attorney General's Consumer Protection Division, consumers can call toll free, 1-877-765-8388 or visit www.michigan.gov/ag.

The Top 10 Consumer Complaints of 2008:

1.   Credit and Financial Concerns:  Complaints in this category range from credit and collection companies, to complaints about mortgage bankers, brokers, and predatory lending matters.

2.   Gasoline/Fuel/Energy:  As gas prices skyrocketed last year, so did the complaints regarding gas prices.  The Attorney General's office continues to monitor prices and investigate allegations of price gouging.

3.   Telecommunications and Cable or Satellite TV:  Complaints in this category typically involve cable/satellite TV services, telemarketing, do-not-call violations, cell phone issues, cramming (unauthorized charges), and slamming (unauthorized switch of a service provider).

4.   Retail:  This category includes problems with extended warranties, the quality of merchandise, rebates, and scanner or pricing errors.

5.    Internet:  This category includes Internet purchases and auctions, failure to deliver or refund, fraudulent e-mail solicitations, and Internet service provider complaints. 

6.   Mail Order:  Moving up from the number seven position from last year, this category includes failure to deliver merchandise, unsolicited merchandise, contest deceptions, and failure to refund complaints.  Lottery and fraudulent check scams are included in this category, and hit seniors particularly hard this year.

7.   Motor Vehicle or Automobile:  This category includes lemon law, advertising, warranty, quality, and misrepresentation complaints.  Complaints against used-car dealers leads this category.

8.   Personal Service Providers:  Moving up from the number 10 position last year, this category includes complaints about failure to refund, failure to cancel a contract, and failure to deliver services.

9.   Small Business Providers:  This category includes complaints by small businesses who received unauthorized services or goods, including advertising and directory publications, unsolicited faxes, and leases for business equipment that cannot be cancelled.

10.  Contractors/Home Improvement:  This category includes problems with the quality of work, failure to deliver services or a refund, and warranty issues. 

Car Warranty Scam:

·     The Scam:  Scams artists contact consumers in a variety of ways, warning that the consumer's car warranty will expire and providing instructions how to purchase an "extended warranty."  The warranties are often scams, and provide little or no additional coverage to the vehicle.

·     How to stay safe:  Before agreeing to purchase an extended warranty, always read the full policy, be wary of high pressure calls, and research the company offering the warranty.

"Debt Reduction" Scams:

·     The Scam:  Companies will call offering help to lower credit card or loan debt by paying the company up front to help lower the interest rate on the debt.  Consumers must be careful because these scam artists are often interested in stealing identities, as well as money. 

·     How to stay safe:  Before paying a company for help, research that company.  Most companies are precluded from charging or receiving money before completing all services.  There are also non-profit debt counselors available, and consumers have the option to contact their bank or credit card provider directly to work out a payment plan.

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