According to the latest report from the annual survey conducted by Consumer Federation of America (CFA) and the North American Consumer Protection Investigators (NACPI), phone IRS agents and other imposter scams topped the list of the quickly-growing complaints to state and local consumer protection agencies last year.
The survey consisted of thirty-three consumer agencies from amongst twenty-one states and inquired about the most common complaints received during the year 2015, as well as the new types of consumer problems. The consumer agencies surveyed are ones that traditionally handle complaints about a broad range of problems.
“If someone calls or emails you unexpectedly claiming to be from the IRS, your utility company, a tech support company, or even your employer, don’t assume that it’s true,” said the Director of Consumer Protection and Privacy at CFA. “Be especially wary if you’re asked to send money immediately or provide personal information that the person should already have – these are danger signs of fraud.”
The survey identifies a new imposter scam whereby wrongdoers infiltrate corporate emails systems in order to forward messages purporting to be from corporate officers, instructing employees to initiate wire transfers.
Fraud is especially difficult to detect and prevent. “By the time consumers complain, the fraudsters have their money, and they intentionally use tactics such as spoofing their Caller ID and email addresses and asking for payment via money transfer services or prepaid cards to make it hard to track them down,” noted the NACPI President.
The survey calls attention to a recently developing problem – the use of iTunes gift cards as a method of payment. Once fraudsters obtain the codes on the gift cards from the victims, they can use those cards to make purchases or sell them on gift-card resale websites.
Ten Most Received Complaints of 2015
- Auto. Misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes.
- Home Improvement/Construction. Shoddy work, failure to start or complete the job.
- Utilities. Service problems or billing disputes with phone, cable, satellite, Internet, electric and gas service.
- Credit/Debt. Billing and fee disputes, mortgage modifications and mortgage-related fraud, credit repair, debt relief services, predatory lending, illegal or abusive debt collection tactics.
- Retail Sales. False advertising and other deceptive practices, defective merchandise, problems with rebates, coupons, gift cards and gift certificates, failure to deliver.
- Services. Misrepresentations, shoddy work, failure to have required licenses, failure to perform.
- Landlord/Tenant. Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, illegal eviction tactics.
- Household Goods. Misrepresentations, failure to deliver, faulty repairs in connection with furniture or appliances.
- Health Products/Services. Misleading claims; unlicensed practitioners.
- (Tie) Internet Sales. Misrepresentations or other deceptive practices, failure to deliver online purchases; Fraud. Bogus sweepstakes and lotteries, work-at-home schemes, grant offers, fake check scams, imposter scams and other common frauds.
Banning mandatory arbitration provisions in consumer contracts topped the list as far as new laws suggested to better protect consumers. Federal agencies, including the Consumer Financial Protection Bureau, are considering restricting these types of clauses. Suggestions also included free credit freezes for consumers on demand, stricter laws against Caller ID spoofing and robocalls, used car lemon laws, and stronger curbs on abusive debt collection.
The full report 2015 Consumer Complaint Survey Report can be seen, here.
The foregoing should be of interest to any company or individual that is the subject of a local, state or federal regulatory investigation or enforcement proceeding. If you require such assistance, or if you would like to discuss the avoidance of related triggers, please contact an experienced New York City consumer defense attorney at [email protected]
HINCH NEWMAN LLP. ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result.
Richard B. Newman is an Internet law, online marketing compliance, telemarketing compliance and regulatory defense attorney at Hinch Newman LLP focusing on advertising and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing and defending clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, complex commercial litigation defense, SPAM law compliance and litigation defense, intellectual property transactional and litigation matters, advising clients on promotional marketing programs, and negotiating and drafting legal agreements.