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Top 5 Fastest Growing Consumer Complaints

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American consumers have a lot to complain about, according to just-released data from the Consumer Federation of America and the North American Consumer Protection Investigators.

The annual CFA/NACPI 2014 Consumer Complaint Survey Report, released Wednesday, found that 37 agencies in the survey received a total of 281,639 complaints last year (which, they pointed out, doesn’t reflect the much larger number of consumers who benefited from enforcement actions that the agencies took or the public education they provided).

Based on figures provided by 35 agencies, the total amount they saved or recovered for consumers through complaint mediation, administrative procedures and enforcement actions exceeded $123 million.

One big complaint: identity theft.

Susan Grant, CFA’s director of consumer protection and privacy, noted on a call to announce the survey findings that there was talk in Washington of the need for a “federal [identity theft] breach notice requirement.” She noted that “most states already have laws” in place that require notifying consumers when their data has been compromised. “CFA thinks better security is needed for consumers’ information, and that should be the focus of legislators and those that hold the data.”

Grant said that “some agencies cited the use of consumers’ stolen personal information to impersonate them in order to claim their tax refunds as a particularly fast-growing and troublesome problem.”

Amber Capoun, NACPI president and a legal assistant in the Office of the State Banking Commission in Kansas, added that “government benefits fraud resulting from identity theft makes it very difficult for the victims to claim benefits that are rightfully theirs.”

The solution to that problem, Grant added, “isn’t to provide consumers with identity theft insurance, it’s to require better security to prevent their personal information from being stolen and fraudulently used.”

The report also notes complaints received last year concerning fraudulent investments and other money-making schemes, pointing to one complaint received by the Massachusetts Attorney General’s Office in which a consumer invested $15,675 in an online advertisement company that promised he would make his money back in less than four months if he posted ads generated by the company every day. The consumer “did make some money, until the company’s website suddenly stopped working and it filed for bankruptcy,” the report states. The state Securities Division and the FBI are investigating.

Read on to see what CFA and NACPI say the are the five fastest growing consumer complaints:

Timeshare resales

5. Timeshare resales

Timeshare resale scams take advantage of consumers who, in many cases, have been pressured into buying timeshares that they haven’t used or can’t afford. Fraudsters promise to sell their timeshares, but after paying a fee up front, the victims never hear from them again.

IRS imposter scams

4. IRS imposter scams

Fraudsters pretending to be from the IRS scare people into sending them money to resolve a trumped-up tax problem. To make the ruse even more convincing, they sometimes “spoof” their caller ID to make it appear that they are calling from the IRS.

Home improvement

3. Home improvement

Shady contractors flock to neighborhoods affected by natural disasters such as tornadoes, floods and wildfires, lured by the prospect of checks from consumers’ insurance companies to repair damage to their homes. Itinerant contractors sweep through areas, knocking on consumers’ doors to offer roof repairs, driveway paving and other services, taking their money, and disappearing, doing little or no work. Some contractors are simply incompetent or irresponsible. And even well-established contractors can generate many complaints if they suddenly have financial setbacks or other problems that result in their not getting the work done as promised.

Erroneous health care billing

2. Erroneous health care billing

Complaints about erroneous health care billing may be due in part to the failure of health care providers to submit information to consumers’ insurers in a proper and timely manner, which some agencies cited as a “new” complaint last year.

Consumer confusion about what insurance will cover is another factor. A recent survey by Consumer Reports National Research found that nearly a third of privately insured Americans have been hit with medical bills that they thought their insurance would pay.

Identity Theft

1. Identity Theft

Identity theft was the fastest-growing complaint given the epidemic of data breaches around the country last year. Some agencies cited the use of consumers’ stolen personal information to impersonate them in order to claim their tax refunds as a particularly fast-growing identity theft problem.

— Check out IRS’ 12 Tax Scams to Avoid in 2015: The Dirty Dozen on ThinkAdvisor.


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