Washington, D.C. – The eleventh annual consumer complaint survey conducted by the National Association of Consumer Agency Administrators (NACAA) and Consumer Federation of America (CFA) reveals that home improvement contracting topped the list of consumer complaints filed with state and local consumer protection agencies last year. Complaints about household goods, such as appliances, furniture, and electronic equipment, were second, followed by auto sales and service.
“Buying big ticket items results in complaints when businesses fail to deliver what they promise or fail to make good on shoddy service,” noted Nancy Sabella, NACAA’s Executive Director. “This year’s survey also shows that consumers are complaining about a wide variety of businesses, ranging from bad cell phone service to over-hyped vacations.”
Home improvement not only came in as the most common complaint to consumer agencies this year, but was also named as the fastest growing complaint category and the type of industry in which a company is most likely to go out of business and to reopen under another name.
“While cross-border investigations and Internet fraud are headline grabbers, the majority of consumers find their problems in everyday issues such as building a deck or buying a car,” stated Stephen Hannan, Board member for NACAA.
Home improvement, household goods, and auto sales top the list of leading consumer complaints.
Consumer agencies across the country were asked to list the top categories that generated the most complaints in 2001. Below are the top 12 problem areas for 2001, with the percentage of agencies that listed each as a major complaint category.
1. Home Improvement 59
2. Household Goods 54
3. Automotive Sales 51
4. Automotive Repairs 46
5. Credit/Lending 42
6. Business Practices 32
7. Services 24
8. Telecommunications 20
9-12. Collections 17
9-12. Pyramids & Business Opportunities 17
9-12. Recreation & Vacations 17
Worst Scams
NACAA member agencies reported scams ranging from shady auto deals, phony credit card offers, door-to-door pavers who take the money and run, pyramid schemes, and the infamous “Nigerian” Internet scam. Agencies reported on enforcement actions that produced refunds for victims across the country. For example, a Virginia advance fee buying club that promised access to credit for “discount club members” generated almost 700 complaints to the Virginia Office of Consumer Affairs and resulted in a multi-state and Federal Trade Commission case that produced $2.5 million in redress for defrauded consumers.
Preemption of State Consumer Protections/Enforcement
This year’s survey explored the growing trend of federal preemption of state consumer protection laws. NACAA members singled out financial and Internet privacy, interstate moving, rent-to-own and payday lending, and the airline industry as having weak federal laws that set the ceiling for state protections or that prevent state and local law enforcement officials from bringing cases to protect their constituents.
“Agencies that are closest to consumers are being denied the authority to enforce stronger state laws or to bring cases against entire industries, such as interstate moving or airlines,” Jean Ann Fox, CFA’s Director of Consumer Protection, said. “States should be able to enact stronger protections and to close loopholes exploited by industries, such as rent-to-own and payday lending, that attempt to evade state protections.”
Complaints Grow at Consumer Protection Agencies
Consumer protection agencies are struggling to protect the public under increasing caseloads and stagnant budgets. The survey revealed that last year NACAA members handled on average 23% more complaints from the year before with only a 7% increase in their budgets. The cumulative figures indicate that since 1997, consumer protection agency budgets have grown only 12% while caseloads have increased by 46%. Agencies responding to the survey handled 324,361 complaints, recouped $108,265,623 for consumers, and satisfactorily resolved 70% of complaints in 2001.
The complete NACAA/CFA report is available online at www.nacaanet.org or at www.consumerfed.org. NACAA also offers advice on filing complaints and contacting local agencies at www.nacaanet.org/complain.htm.
Contacts:
Nancy Sabella, 202-347-7395
Jean Ann Fox, 202-387-6121
NACAA is a membership organization of consumer protection agencies at all levels of government. This survey report is based on 41 NACAA members’ responses to questions about their 2001 complaint records. CFA, a non-profit federation of almost 300 pro-consumer organizations, has worked with NACAA on the survey since it was first initiated in 1992.