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Top Ten Consumer Complaints

 

Madison - The National Association of Attorneys General (NAAG) has announced the Top 10 consumer complaints for 2008. The top three: debt collection, auto sales and home repair/construction remained the same from year 2007.

 

Nationally, the top ten categories of consumer complaints of 2008 were: 

 

1)      Debt Collection

2)      Auto Sales

3)      Home Repair/Construction

4)      Credit Cards (tie)

4)      Internet Goods and Services (tie)

6)      Predatory Lending/Mortgages

7)      Telemarketing/Do-Not-Call

8)      Auto Repair

10)    Auto Warranties (tie)

10)    Telecom/Slamming/Cramming (tie)

 

The results are based on an informal nationwide survey conducted by the National Association of Attorneys General. 

 

Wisconsin Attorney General J.B. Van Hollen and the Wisconsin Department of Justice are members of the National Association of Attorneys General.  Consumer protection involving similar illegal acts in multiple states are often investigated and enforced by a number of state Attorneys General offices working together.  These cases are commonly known as "multi-states."  In 2008, Wisconsin participated in a number of multi-state consumer protection actions against a number of companies for fraudulent or deceptive trade practices, including 

 

COUNTRYWIDE MORTGAGE

Reached a settlement with Countrywide Financial Corporation, the nation's largest mortgage lender and servicer, that will provide loan modification eligibility and over $41.1 million in other economic relief for Wisconsin borrowers including affordable, streamlined loan modification offers to over 2,900 eligible borrowers with subprime and pay option adjustable rate mortgage borrowers; more than $1.6 million in foreclosure relief benefits for Wisconsin consumers;  waivers of default/delinquency fees, loan modification fees and prepayment penalties; and the creation of a foreclosure mitigation program.

 

MATTEL/FISHER-PRICE

Reached a settlement agreement with Mattel, Inc. and Fisher-Price, Inc., its subsidiary, for events that resulted in a recall of the company's toys for excessive lead paint during 2007.  The agreement requires Mattel to comply with more stringent lead coating standards and make a $12 million payment to be divided among the participating states.   

 

AIRBORNE

Settled claims against Airborne Health, Inc., the Florida-based maker of the Airborne Effervescent Health Formula, and its founders and current owners.  The defendants paid $7 million to settle allegations that they made unsubstantiated and unlawful marketing claims concerning their products.  In addition, the defendants agreed to various restrictions including not making any express or implied claim concerning the health benefit, performance, efficacy or safety of their dietary supplement products unless at the time the claim is made competent and reliable scientific evidence exists to substantiate each claim.  

 

MERCK AND COMPANY (VIOXX)

Obtained a stipulated judgment with Merck and Company, Inc., concerning the company's deceptive promotion of the drug Vioxx.  When promoting Vioxx directly to consumers and to health care professionals, Merck misrepresented the cardiovascular safety of Vioxx.  Merck later admitted that Vioxx caused serious cardiovascular adverse events and withdrew the drug from the market.  In addition to a $58 million payment to the participating states with Wisconsin's share being $1,558,914, the stipulated judgment limited Merck's ability to deceptively promote any Merck product.  These limitations included areas such as the deceptive use of scientific data when marketing to doctors, "ghost writing" of articles and studies, failing to adequately disclose the conflict of interest of Merck promotional speakers when these speakers present in supposedly independent Continuing Medical Education, and conflicts of interest in Merck sponsored Data Safety Monitoring Boards.  Merck is also required to comply with recommendations of the FDA before engaging in direct-to-consumer advertising with respect to its pain relieving drugs. 

 

DISH NETWORK

DISH Network agreed to pay restitution to consumers and to enter into an agreement that limits how it can market services in the future to settle consumer protection allegations with Attorneys General in 46 states.  The states alleged the satellite TV provider and its third-party retailers engaged in deceptive and unfair sales practices.   

 

"Markets, whether financial or consumer, function best without fraud," said Van Hollen.  "Consumers shouldn't have to contend with false and misleading representations in the marketplace when they make purchasing decisions.  By working with state attorneys general across the nation, we are able to leverage our limited resources to better enforce our state consumer protection laws and to promote accurate representations in the marketplace," said Van Hollen.   

 

On a state level, the Wisconsin Department of Agriculture, Trade & Consumer Protection (DATCP) is generally the primary agency charged with enforcing consumer protection laws.  When court action is needed to enforce consumer protection laws, DATCP will refer matters to the Department of Justice for further investigation and, if appropriate, litigation to enforce consumer protection laws.  Recent examples include:  

 

KOOLVIEW/NATIONAL ENERGY REBATE FUND

The state sued several businesses and individuals for deceiving over 320 Wisconsin consumers into purchasing replacement windows and other products offered by Kool View by misrepresenting that they could obtain rebates four years later for the amount of their purchase, essentially making the products free, and that the program was limited to participants in an energy field study.  In reality, only 8% of the money needed to pay full rebates was set aside, and there was no legitimate energy field study.  The state obtained judgments of $5.5 million dollars against the National Rebate Fund and its owner and $220,000 in judgments against Kool View and its owner.  The defendants were also ordered not to conduct future sales or marketing efforts in Wisconsin, or from withdrawing any funds being held in escrow to pay rebate claims. 

 

Radical Persson, Inc

Sued and settled a lawsuit against internet based businesses Radical Persson, Inc., and ILD Telecommunications, Inc., for placing charges on the telephone bills of Wisconsin businesses for services that were not authorized or that were obtained through deceptive telemarketing practices.   

 

DUANE KOLVE

Participated in the criminal prosecution of Mr. Kolve for racketeering involving fraudulent charitable solicitations.  Potential donors were led to believe that their donations would be put to good use right away for charitable purposes such as purchasing needed safety equipment for law enforcement officers, funding children's burn camps, providing housing assistance to homeless veterans and financially assisting disabled firefighters and law enforcement officers.  In reality, the charities for whom Kolve's companies were raising funds received only pennies on the dollar. Eighty-five percent of the donations raised went to fraudulent telephone solicitation businesses run by Kolve. Individuals who ran the claimed charities located in Louisiana, California and Wisconsin took further amounts of the donated sums, leaving behind only between 35 cents and $2.92 of every $100 donated, which was then actually utilized for the charitable purpose.  Kolve and his businesses fraudulently obtained over $10,000,000 in donations to claimed charities from over 450,000 separate donations during the period of 2002 through 2005.  

 

According to the Wisconsin Department of Agriculture, Trade & Consumer Protection (DATCP), the top 10 categories of consumer complaints in 2008 were as follows: 

 

1)      Telemarketing (No-Call)

2)      Landlord/Tenant

3)      Telecommunications 

4)      Home Improvement

5)      Satellite Dish

6)      Internet Service Provider 

7)      Credit Cards

8)      Gasoline/Fuel Non-Heating 

9)      Motor Vehicle Repair

10)    Travel/Tourism  

 

Wisconsin consumers are encouraged to contact DATCP at 1-800-422-7128 with general consumer complaints (auto repairs, pyramid schemes, investment opportunities, telemarketing fraud, Internet fraud, landlord/tenant, sweepstakes, travel scams, etc.). Consumers can also call DATCP to find out if there are any complaints against a company. 

 

Founded in 1907, the National Association of Attorneys General serves as a key resource to assist Attorneys General and their staffs to respond effectively to emerging state and federal legal issues.