The ninth annual survey conducted by the National Association of Consumer Agency Administrators (NACAA) and the Consumer Federation of America (CFA) reveals that Internet complaints have grown more than any other type of complaint, and that complaints about household goods (including computers) has made the "top three" for the first time since NACAA and CFA began this survey, nine years ago.

Auto repair dropped out of the top three into fourth place for the first time in the survey’s history. Complaints to consumer protection agencies about utility services went from ninth to sixth place in one year. NACAA members also reported about scams targeting the elderly, which involve a wide range of products and services.

NACAA is a membership organization of consumer protection agencies at all levels of government. This survey report is based on NACAA members’ responses to questions about their 1999 complaint records. Almost all of the 49 respondents were city, county or state consumer agencies. NACAA member agencies vary considerably in size and resources. Some agencies have only two staff people; others have hundreds.

CFA, a non-profit federation of 260 pro-consumer organizations, has worked with NACAA on the survey since it was first initiated in 1992.

Consumer agencies were asked to list the top categories that generated the most complaints in 1999. Below are the top 10 problem areas for 1999, with the percentage of agencies that listed each as a major complaint category.

Trends

NACAA member agencies were also asked to name the subject that generated the biggest increase in complaints in 1999 compared to the same subject in 1998. The subject that was named by the most agencies was Internet, with an average increase of 146%. (Details below.)

 Five-Year Trends

• Home improvement complaints have moved to the top of the list. A possible reason may be the booming economy and the high demand for a limited supply of reliable contractors. Other cases involved predatory lending and outright fraud.

• This is the first time since NACAA and CFA have conducted the annual complaint survey that auto repair has not been in the top three (it’s fourth.)

• This is also the first time that household goods has moved into the top three. It has moved up steadily for the past three years: from fifth to fourth to third place. The category of household goods includes big-ticket items, such as appliances; electronic equipment and computers; and furniture. The complaints involved defective goods, failure to honor warranties, refunds and deceptive advertising.
• Utility complaints are higher than ever, appearing in sixth place. They had not been in the top ten for the last five years, until last year when they appeared in ninth place. This increase in complaints to consumer protection agencies, in addition to utility regulators, may demonstrate the impact of opening monopoly utility services to increased competition. This category includes complaints about telecommunications companies as well as other utilities.
• Auto sales complaints remain consistently at or near the top of the list. Some of this year’s auto complaints involved problems with car titles. Auto leasing, which reemerged last year briefly, has once again disappeared from the top ten list.
• Leisure/travel complaints have once again appeared as a top problem, though at the bottom of the list. Last year they appeared on the list for the first time, and they remain in tenth place this year.
• Credit/lending stayed in fifth place, where it appeared last year, but has been joined by collection, a related problem, in eighth place this year. Collections did not appear in last year’s report as a "top ten" problem, but has appeared in the bottom half of the list in previous years.

NACAA members are increasingly handling Internet complaints from consumers. All agencies were asked to compare the number of Internet complaints received in 1998 to those received in 1999. Among all agencies, the average increase was 38%. (This follows a 39% increase from 1997 to 1998 and a 23% increase from 1996 to 1997.) As noted above, Internet problems generated the largest increase in complaints, among the largest number of agencies. For those agencies, the increase was 146%. These cases mostly involved problems with merchandise ordered through Internet auctions.

NACAA members were also asked to indicate the most common types of Internet complaints among auctions; Internet Service Providers; merchandise ordered over the Internet; Securities/investment fraud; lotteries/sweepstakes; credit cards/credit repair; business opportunities; loans; and 'other.' Merchandise ordered over the Internet came in first with 39% of the agencies indicating it as the most common type of complaint; problems with Internet Service Providers (ISPs) came in second at 24%; and problems with auctions came in third at 16%. It is worth noting, however, that auction problems usually include problems with merchandise and therefore could be reported in either category.

Con artists often target specific populations in their scams. The elderly are one of these "target" groups. The following summarizes some of the worst types of elder scam cases handled by NACAA members in 1999. The largest concentration of problems appeared in the areas of home improvement and sweepstakes.

Many agencies (including the NYC Department of Consumer Affairs, NYS Consumer Protection Board, Somerset County NJ Division of Consumer Affairs) reported that their worst scams against seniors involved home improvement contractors. In the most common scenarios, the contractor either failed to perform the work (or finish the work) or performed work of poor quality. Sometimes the contractor even requested deposits from elderly homeowners (allegedly for supplies) and simply never returned (Mercer County PA Community Action Agency.)

The Detroit Consumer Affairs Department reported that an elderly homeowner had contracted repeatedly, over a 20-year period, with a local home improvement contractor for various work. Each job was financed, and with each additional job new loans were obtained, folding the old balance into the new loan. In addition, one loan consolidated various credit accounts into a high interest, high fee mortgage in excess of $30,000. Subsequently, the contractor did additional work, secured a second mortgage and when the consumer was financially unable to pay, threatened foreclosure.

The Department negotiated a settlement in which the company forgave the entire balance of $6000 on the most recent loan.

The Pinellas County (FL) Department of Consumer Protection reported a case against a 63-year-old woman with partial cerebral palsy, who was living on her own. In February 1999 she purchased a complete water filtration system for her home, from Community Water Works. Within one week of this purchase, Thomas Eugene Hodges, Jr., a former employee of Community Water Works, arrived at the victim’s home without prior notice. Hodges introduced himself as an employee of Water Refining and began alleging that the water filtration system sold to the victim by Community Water Works included used components. Hodges convinced the woman to replace the "used" equipment with a new water filtration system.

Over the course of a two-month period, Hodges initiated five separate contracts with the victim ranging from $1900 to $2995 and received seven checks totaling $13,735 from her. The DCP later discovered that Hodges failed to replace any components of the water filtration system that was originally installed by Community Water Works.

Hodges faced criminal charges, pled Nolo Contendre, was placed on probation for six months, fined $403 and paid restitution in the amount of $13,735.

The City of Gary IN Department of Consumer Affairs reported that All Pro Builders, a remodeling company, "disappeared" without a trace! The company coerced elderly homeowners into taking out large mortgages and loans for remodeling jobs, but either did no work, or only partially completed the work. Twenty consumers filed complaints against the company. The total monetary loss of all twenty cases is approximately $150,000. The DCA referred the case to the Building Department and the Attorney General’s Office.

The Gloucester County (NJ) Office of Consumer Protection reported cases of telemarketers offering credit card protection plans. These plans generally offer no more protection than that already guaranteed by federal law. Two companies were charging consumers $299.10 for 10 years of credit card protection. Both companies were out of state and the consumers had to wait for the amount charged to appear on their bill, to obtain an address and phone number for the company. Consumers were referred to the Elder Fraud Investigations Unit.

The VA Office of Consumer Affairs, Department of Agriculture and Consumer Services reported a Y2K credit card fraud aimed primarily at the elderly. In this scam the telemarketer calls the home, and asks for verification of a credit card number, purportedly to protect against a Y2K failure of bank records. Once they have this number, they can use it for unauthorized purposes.

The Ohio Attorney General’s Office discovered that a number of related companies concentrated in the Long Island area of New York operated a scam in which telemarketers used high pressure sales techniques to sell what were purportedly gold and rare coins to victims all across the country. They promised to make the victims huge profits by reselling their coin portfolio. The victims were predominantly senior citizens. The coins were grossly overpriced. They never resold any of the coins as promised and the victims were left with merchandise not worth a fraction of what they paid. The average loss to the victims was in the range of $80,000 to $225,000. The companies had common ownership interests and shared leads on victims, who were contacted repeatedly.

The NJ Division of Consumer Affairs received complaints about U.S. Capital Funding, of Lake Worth Florida. The company lured consumers into an investment scheme under which money was supposed to be invested in notes to finance government and business accounts receivable. The U.S. Capital sales brochure called such investments "one of the most secure and lucrative areas of commercial banking." In fact, none of the receivables backing the notes were insured or backed by the government. Consumers were promised dividend checks paying 9.25 percent interest, but received nothing except for statements of earnings. New Jersey and Florida authorities are investigating the company.

The Santa Cruz District Attorney’s Office investigated a scam in which the criminal calls the elder person claiming that she’s won a Canadian lottery prize. The criminal then states that the victim must pay the taxes up front to receive the prize. One recent Santa Cruz victim mailed a $16,000 cashiers check to the con artist.

The San Francisco District Attorney’s Office reported a case in which an elderly woman was purported to be defrauding her friends based upon a bogus business opportunity. An investigation revealed that the woman was herself a victim of a telemarketing sweepstakes fraud. The telemarketers had represented that she had won a large sum of money and only needed to send in the taxes and fees to collect her prize. Her subsequent attempts to get money from her friends were aimed at paying off these "fees and taxes." She intended to pay her friends back after she received her sweepstakes winnings. The Office did not prosecute the woman. The telemarketing case was referred to Canadian authorities.

The Nebraska and North Dakota Attorney General’s Offices have reported a rash of Canadian sweepstakes and lottery scams that have resulted in thousands of dollars of losses to consumers. In one particularly devious scam, the con artist sends a $10,000 check to the consumer. As soon as the consumer has had an opportunity to deposit the funds into his or her account, the consumer receives a call from the con artist asking for $1300 in attorney fees that must be paid on the "winnings." Once the original check reaches Canada it’s declared a forgery (this takes over a week) but by then the consumer has paid the "fees."

Another scam imitates Publishers Clearinghouse. However, after the consumer is informed of the "win" he or she is asked for $5000 in "bonding funds" that the consumer must pay in order to get the millions and the new car.

In another scam a lottery ticket is sent through the mail. The accompanying material indicates that the consumer has won $5000. In order for the consumer to obtain the prize, he/she is asked to send a picture, a copy of his/her driver’s license and $200. The Attorney General’s Offices suspect that this is an identity theft ring.

In the "check is at the border" scam, the consumer is told that he/she is a definite winner of $100,000 from a Canadian sweepstakes. In the unlikely event that the consumer can drive to Canada within 24 hours they can pick up the money. Alternatively, the consumer can send $2000 for attorney’s fees and an attorney will allegedly process the award and send the funds.

In a final scenario, the consumer is told that the Canadian government has prosecuted a company to which the consumer has sent money for a sweepstake. The caller is allegedly due to receive some of the court judgment. However, once again, before the consumer can receive the award he/she must pay taxes. The taxes range from one to several thousands of dollars.

The Bucks County (PA) Consumer Protection Office received complaints about salespeople offering Living Trusts. The consumers were led to believe that the Trusts would create tax savings based upon the salespeople’s misrepresentations about the costs of probating a will. Probating a will is not expensive in Pennsylvania. The consumers were also led to believe that an attorney was reviewing their case, though none of them ever spoke to any attorney.

In a case reported by the CA Department of Consumer Affairs, a scam artist sold an elderly couple a fake medical insurance policy for $7000, which represented their life savings. The policy was completely bogus and the scam artist was never caught.

The Los Angeles County Department of Consumer Affairs filed suit against Elephant Carpet Care based upon its treatment of a 92-year-old consumer. The consumer contracted with the company to have his three rooms, one sofa, and one chair cleaned for $50.00. However, the company had him sign a contract indicating that he owed $909.88. DCA filed suit against the company and obtained restitution for the consumer.

NACAA members were also asked to describe their worst car title complaints. In these cases, consumers are unable to obtain the title to a car, even though they have paid for the vehicle. Among the eight agencies that noted a change in car title complaints, the average increase in complaints was 55%. The failure of a dealer to provide title often covers up other nefarious practices, as the following cases illustrate.

The Gloucester County (NJ) Office of Consumer Protection reported that in February 2000 a consumer purchased a vehicle from Premier Auto Sales for $36,000. The consumer was told that the vehicle was purchased from out of state and the dealer was having problems retrieving the title. This went on for approximately three months.

The Office uncovered that the dealer purchased the vehicle from Mannheim Auto Auction. Through a special arrangement with the auction, the dealer had ninety days to pay for the vehicle. When the dealer finally did pay, the check was returned for insufficient funds. The auction was holding the title until the dealer paid for the vehicle.

After lengthy negotiations, the Office was able to expedite the transaction and obtain the title for the consumer.

The Gloucester County (NJ) Office of Consumer Protection also had a case with a dealer, Alexander Auto Sales, that sold a vehicle to a consumer for $27,000. The dealer failed to turn over the title claiming that the car was from out of state and that there were mistakes in the title that were taking time to correct. In fact, the dealer owned the vehicle but had an outstanding loan of $20,000 on the vehicle. The consumer also had a loan on the vehicle for $17,000. Additionally, the dealer had sold the consumer an extended warranty policy for $1100 but never forwarded the payment to the Warranty Company.

After negotiations, Alexander released the title and the finance company took a $20,000 loss. The consumer paid most of the loan and miscellaneous charges, though the warranty was waived. Alexander Auto Sales is now out of business. The case has also been turned over to the Prosecutor’s Office.

The New York City Department of Consumer Affairs handled a case in which the consumer purchased a 1994 Toyota for $12,000. New York state authorities informed her when she went to register the car, that it had been "totaled" in a prior life and was considered a "salvage" vehicle. In New York, one cannot sell a salvage vehicle without specific disclosures and the buyer cannot obtain title until the car undergoes a rigorous inspection. Some states have procedures less stringent than New York’s, which allow a dealer to "wash" the titles of wrecked vehicles so that consumers unknowingly buy salvage cars.

The Ohio Attorney General’s Office filed suit against Perry T. Canterbury individually and d.b.a. Perry’s Cars. Perry’s Cars was a used car dealership selling newer model used vehicles. The dealership was selling vehicles and not providing titles to either the consumer or the financial institution that had financed the consumer transaction. In addition, the dealership was not paying off the loans on trade-in vehicles. The dealership then sold the trade-in vehicles and therefore was not able to execute title to those "second" consumers.

Through a special Ohio Title Defect Rescission Fund, the Office was able to refund the payments that the "second" consumers had made to the dealerships for the cars for which the consumers did not obtain title. The Attorney General’s Office took possession of the vehicles. The finance companies, that had transferred funds to the dealership without first securing a title, were instructed to pursue their loss with the dealership. The Office was also able to return the trade-in cars to the consumers.

Many of the worst scams reported for 1999 were home improvement scams. Surprisingly, no agencies reported auto related problems as a worst scam in this year’s survey. More scams dealt directly with finances: credit card fraud, credit protection, and investments. Intermingled with these, however, were some newer concerns, such as privacy and computer sales cons.

The Montgomery County MD Division of Consumer Affairs received complaints about US Training.com. The merchant represented that it was "a premier computer services company" and offered to provide computer training and certification to its students. Consumers paid as much as $3495 for a variety of computer training programs. Consumers complained that the company failed to provide training, cancelled and postponed classes and failed to provide training materials. The merchant was never licensed to operate a career school and was shut down after a joint investigation by DCA and the MD Higher Education Commission. The parent corporation, Technology Training Consortium, Inc. also operated training sites in 12 other states. Information on the company has been referred to the FBI for review.

The Ohio Attorney General’s Office sued Bank Card Security Center, Inc. (BCSC) and its President Steven P. Zwicker, for fraudulent telemarketing activities. The company, operating out of their offices in Florida, made false and misleading representations and used scare tactics to sell unnecessary insurance as part of their credit card protection scam.

To induce victims to purchase worthless credit card protection services, BCSC would represent, either expressly or by implication, that BCSC’s telemarketers were calling from the victim’s credit card issuer. BCSC told victims that criminals were breaking into computer banks nationwide and stealing credit card information that the criminals would use to create duplicate credit cards and run up fraudulent charges on a victim’s account. BCSC would tell their victims that since they did not know that their account information had been stolen, they would not be able to report the card as lost or stolen. Therefore, BCSC told the victims, as the real account holder, they would be liable for all of these fraudulent charges. BCSC told their victims that if they purchased their credit card protection service for a one-time lifetime fee of $199.00, that any purchases on the consumer’s credit card that the consumer did not sign for, purchase or authorize would be removed from the consumer’s credit card accounts with no questions asked. In fact, a consumer cannot be held liable for more than $50.00 for any unauthorized charges. Therefore BCSC was selling a protection that the consumers already had.

The Attorney General’s Office received complaints from 6,934 Ohio victims. Victims were charged various prices ranging from $7.95 to $199.00. The Attorney General’s Office obtained a consent judgment in which the defendants are permanently enjoined from selling their "services" in Ohio and are required to provide full refunds to all Ohio consumers who request refunds. The defendants have also made a $50,000 deposit to the restitution fund and paid a $50,000 civil penalty which could rise to $500,000 if they don’t comply with the terms of the consent judgment.

The San Francisco District Attorney’s Consumer Protection Unit received complaints about Providian National Bank involving deceptive marketing of its products. Specifically the bank failed to disclose significant limitations in a credit protection program, which allegedly protected people for up to 18 months in the event of involuntary unemployment, hospitalization, accident, sickness or disability.

The benefits were in fact limited by the number of months that the consumer had paid into the program; were not available if the work was part-time; and were not available if the credit card was not current or was over the limit. Providian could also deny benefits if the customer made more than the minimum payment on any other credit account or if the customer used another institution’s credit card or accessed credit from any other lender.

Providian’s deceptive marketing practices also effected a program aimed at getting consumers to transfer their credit card balances to a Providian issued card; as well as their claims not to charge an annual fee, when instead they coerced consumers into signing up for credit protection for which it charged $156 a year. Providian was sued by the Office of the Comptroller of the Currency and entered into a settlement in which they agreed to stop their deceptive practices and paid $300 million to consumers harmed by those practices.

The Somerset County, NJ Division of Consumer Affairs resolved consumer complaints about a health club, Ultimate Fitness, which sold memberships and never opened. The DCA received 40 complaints with aggregate losses of $30,000. The Division formed a partnership with the municipal police Department and State Division to obtain full restitution for consumers, administrative costs and a consent agreement signed by the principals.

The Los Angeles County Department of Consumer Affairs reported that a consumer contracted with Great Expectations (a dating services company) to help him find a significant other, for $4190.00. The consumer died one month after signing the contract. The consumer’s son-in-law requested a prorated refund; the company refused to refund the money. DCA was able to secure a refund totaling $3,136.50.

The NJ Division of Consumer Affairs developed a case against United Micro System. The company allegedly repeatedly made false and misleading claims in Internet advertisements and in national magazines about its hair replacement system called "Dermal Retention." The complaint alleged that UMS charged victims across the country and in Canada anywhere from $2000 to $8000 to undergo an alleged "permanent" hair replacement process that involved nothing more than gluing toupees to clients’ scalps. The case was settled with the company agreeing to pay nearly $300,000 in consumer restitution and costs and to change its advertising and sales practices.

As in the area of elder scams, many agencies reported that their worst overall scam involved home improvement fraud. The scenarios are quite similar and generally involve failing to complete work, doing shoddy work or absconding with payments prior to completing or starting a job. Some more specific examples follow.

The City of Gary IN Department of Consumer Affairs reported complaints about Atlas Custom Builders/Brightland Construction, of Illinois. The company disappeared without paying two contractors and failed to complete work on three homes. The monetary losses are estimated at $20,000, including incomplete work for the three consumers and non-payment to employees. The case was referred to the Attorney General’s Office.

The New York City Department of Consumer Affairs received over 25 complaints about Rehab Industries. Consumers complained that the company either failed to complete work that had been agreed upon, or did a shoddy job. Further the company, which had a lending license as well, consolidated loans of the effected consumers, misrepresenting the terms of the consolidation and leaving them under worse terms than their original debt. The Department revoked the home improvement license (twice – the second time when they returned under a different name.) The national office of Housing and Urban Development is currently investigating the company.

The Detroit Consumer Affairs Department reported that a heating and cooling contractor, Century Comfort Centers, convinced a homeowner in 1996 that her existing furnace was dangerous and needed replacement. They sold her a furnace, charging her triple the fair price for the installation. Two years later, while servicing the furnace, they convinced the homeowner that her new furnace was deteriorating and that she needed several thousand dollars worth of useless add-on equipment to make it run properly. They told her that they would consolidate the old loan balance on the furnace with the new purchase and obtained a new mortgage for her in the amount of $7500.

A year later the company filed for bankruptcy. The homeowner received a delinquency notice from the first lender. Upon investigation, it was determined that the contractor did not, as promised, "consolidate" or pay off the old loan with the proceeds from the new loan. Rather, they kept the excess for themselves, and made the monthly loan payments so that the homeowner would not find out.

The Department was able to negotiate with both lenders to forgive the balances on both loans, saving the consumer approximately $11,000.

The District Attorney’s Office, 4^th Judicial District, in Colorado, prosecuted Gary and Linda Hurt, d.b.a. Performa Realty. While working in real estate management, the Hurts disappeared with all funds that they held in an escrow account. The loss to the consumers totaled $269,645.96. There were 98 victims. The defendants were captured, tried, and found guilty of defrauding a secured creditor. They were sentenced to 10 years probation, 90 days in jail, restitution, 200 hours of Useful Public Service, and costs.

The Pinellas County, FL Department of Consumer Protection handled a case against David Allen Lee, who committed a series of crimes ranging from home solicitation sales without a permit, to organized fraud. Lee posed as a marine contractor specializing in seawall, dock and deck construction and repair. Lee has sixteen known victims who suffered everything from inconvenience and minor monetary loss, to severe disruption of their lives and individual losses of up to $3400. One victim is convinced that the stress of dealing with Lee caused her husband’s death from a heart attack. Altogether, Lee defrauded his known victims for nearly $20,000. He is currently in prison based upon a prior conviction of consumer fraud, and is awaiting trial on these criminal charges.

The Orange County FL Consumer Fraud Unit reported that the National Calling Card Association (NCCA Inc.) and DRW Inc. (CEO/President Darrell R. West) conducted a multi-level investment scheme in which prospective investors listened to a presentation at various hotels in the US, Puerto Rico and the Caribbean on investments in long distance pre-paid calling cards. The sales pitch that enticed consumers to invest was to offer prospective investors an "advance" on "expected commissions." The consumers, after investing an average of $3500 to $10,000 each on the different investment options offered by NCCA/DRW began to realize that they were not receiving their commissions. When consumer began requesting refunds the principals refused, claiming "contractual issues." In fact, the principals had diverted the funds for other uses. The FBI is currently investigating the company.

The Bucks County (PA) Consumer Protection Office reported that A. Bassener, Ltd., a moving company with several addresses in the Bucks County and Philadelphia regions, was severely overcharging unsuspecting customers, holding furniture as collateral for payment (hostage freight), damaging furniture and failing to provide proper storage. The President of the company, Andrew Bassener, was arrested, fined and the business was closed. The Philadelphia District Attorney and Pennsylvania Attorney General’s Offices conducted the prosecution.

The MA Attorney General’s Office and the Office of Consumer Affairs and Business Regulation, Division of Banks ordered a downtown Boston office of Mail Boxes, Etc., to shut down for illegally operating a "pay-day loan" brokerage business.

The Mail Boxes Etc. was cited for violating the usury and licensing requirement of the Commonwealth’s Small Loan Act. The Mail Boxes Etc., location illegally took applications and processed loan documents for County Bank, Rehoboth Beach, Delaware, an FDIC insured bank. These short-term payday loans had annual percentage rates of over 476%. Loan applications were forwarded to the Cheyenne Servicing Company, Colorado Springs, Colorado for approval. County Bank then would electronically transfer up to $300 into a consumer’s checking account. The loan and finance charges would be electronically debited from the borrower’s account the following payday. Loans could also be repeatedly rolled over resulting in additional finance charges to the consumer.

The Massachusetts Small Loan Act prohibits anyone from making or brokering loans of $6000 or less without a license from the Division. The law also caps annual interest rates at 23% and limits other fees to $20. The MA Attorney General’s Office sued the company and obtained restitution for the effected consumers and permanent injunctive relief.

The San Diego County Department of Agriculture, Weights and Measures reported that Rite Aid Corporation was charged with, among other things, making misleading statements concerning the price, availability, and expiration dates of certain products, and selling unsealed or previously opened medical devices. The complaint also alleged scanner inaccuracies, the sale of outdated products, and pre-expiration dating of prescription items. The company settled for a $2.8 million fine and a statewide injunction.

NACAA members were asked in the survey to single out the most needed additional consumer protections.

Not surprisingly, given the increase in Internet complaints, many NACAA members called for increased protections for consumers transacting business over the Internet. There was also a strong push for increased consumer education at all levels of schooling.

• Increase consumer education in elementary schools, high schools and colleges.

• Establish state licensing or registration of home improvement contractors coupled with mandatory postings of bonds by contractors to protect consumers who have problems with contractors.

• Establish protocols for Internet Service Providers to follow in assisting government consumer protection agencies investigate and resolve consumer complaints.
• Require all Internet businesses to disclose their physical location, phone number and legal name.
• Subject all Internet businesses to the jurisdictions of both the residence of the consumer and the location of the business.

• Establish statewide limits on interest rates of payday loans through all venues, including local vendors, financial institutions and through the Internet. Increase enforcement of requirements that payday lenders and title loan companies disclose their fees as an annual percentage rate and as a finance charge prior to closing or renewing the loan with the consumer.

• Provide for protection against unauthorized charges on credit card and bank accounts by businesses that have received "shared" account information from financial institutions or other businesses. Credit card and bank account information should come directly from the consumer to authorize any transaction.

• Create new laws protecting consumers who have left deposits on merchandise with merchants that go out of business. There are very few areas where consumers’ deposits or merchandise are protected by bonds or guarantee funds.
• Create protections for consumers who contract with stores that sell furniture and other large furnishings so that consumers can cancel transactions at their option should delivery be unduly late or delayed.
• Eliminate or cap restocking fees in retail stores.
• Require better disclosure of limits on warranty coverage in extended warranty programs.

• Create legislation establishing a federal/state "Do Not Call" registry, to limit telemarketing calls.
• Increase penalties for telemarketing fraud against seniors.
• Require registration of telemarketers including names of principals, principle location of business, annual volume of business, major clients and copies of scripts.
• Establish disclosure requirements for total terms of sale including length of contract, total cost, and amount of periodic payments.

The survey revealed that the trend of NACAA member agencies doing more with less has leveled off. On average, NACAA members handled 2% more complaints in 1999 than in 1998. They did this, on average, with a 1% budget increase.

Over the last four years, the trend shows a sharp increase in cumulative caseload compared to increases in resources.

In other words, there has been a 17-fold increase in caseloads relative to budgets. Even with these increasingly strained resources, these agencies managed to resolve an average of 73% of the complaints that they received and returned an average of $356 to each consumer who received restitution.

The number of complaints and dollars recovered vary widely from agency to agency. For example, the NJ Division of Consumer Affairs handled 550,000 complaints and recouped $23 million for consumers. The San Diego County Department of Agriculture Weights and Measures handled 446 complaints and recouped $2,830,000 for consumers. The City of Gary Indiana, one of NACAA’s smaller members, handled 433 complaints and recovered $662,993.

These statistics do not take into account the calls that agencies receive for advice and information, which usually total several times the number of formal written complaints. The value of the advice and information that consumer agencies dispense, both through their complaint lines and also through media interviews, newsletters, brochures, cable television shows, special events and other forms of public outreach is incalculable, but it is undoubtedly great.

Every complaint that a consumer is able to resolve him or herself, armed with information about the applicable rights and remedies, results in savings not only for the parties involved, but for the courts or government agencies that would otherwise be called upon to intervene. Each time a consumer escapes being ripped-off because of advice or information from a consumer agency, not only does he or she avoid losing money, but that money can be used to buy goods or services from legitimate businesses. Further, each time a business asks a consumer agency for information about the rules and regulations that it must follow, the potential for disputes and legal action is reduced.

Moreover, every time that a consumer office provides information or assistance, or takes enforcement action to stop abuses in the marketplace, the public perception of government is enhanced. Public confidence in business is also boosted through oversight and enforcement by consumer protection agencies. Finally, publicity about enforcement actions helps to curb deceptive practices by would-be offenders who do not want to risk being the target of the next agency action.

Also available in a pdf version