Top 10 Consumer Frauds and How to Protect Yourself
State Attorney General Eric Schneiderman released the 10 most common consumer fraud complaints from 2012 to kick off Consumer Protection Week.
“In these challenging economic times, it is more important than ever to protect consumers from the deceptive practices of unscrupulous corporations that try to lie, cheat and steal from hard working New Yorkers,” said Schneiderman. “My office will continue to send a message to businesses that consumers have rights and – if those rights are violated – we will come after you. It is important for consumers to not only know their rights, but how to fight back. In addition to taking action against those who cheat New Yorkers, this office is an excellent resource that can help stop scams before they start.”
Internet scams topped the list with over 4,000 complaints in 2012. Here are the top 10 and the number of complaints received by the Attorney General’s Office in 2012.
1. Internet (privacy issues; spyware;consumer frauds) — 4,096
2. Credit (debt collection; credit card billing; debt settlement) — 3,167
3. Automobile (buying; leasing; repair; service contracts; rentals) — 2,950
4. Consumer-Related Services (security systems; restaurant/catering services; tech repairs; dating services) — 2,070
5. Landlord / Tenant (deposit releases; tenant-harassment) — 1,808
6. Mortgage (mortgage modifications; mortgage and loan broker fraud; foreclosures) — 1,511
7. Home Repair / Construction (home improvement services not delivered or done poorly) — 1,125
8. Retail Sales (any sale of goods: food; clothing; rent to own; wholesale clubs) — 974
9. Mail Order (purchases made online or from a catalog) — 868
10. Telecommunications (phone cards; cellular services; pay-per-call; slamming; cramming) — 805
How to protect yourself:
- Internet: Always make sure websites are secure before providing any financial information, such as a credit card or bank account number. Secure website addresses start with “https” and have a symbol, such as a lock. These secure sites use encryption to scramble your information as it is transmitted over the Internet to keep it secure. Learn more here.
- Credit: Debt collection is the most common type of credit fraud, and consumers must know their rights. Debt collectors may not harass or abuse consumers, nor provide misleading information – for instance claiming to represent a government agency. Anyone with credit problems should contact non-profit credit counseling agencies licensed by the New York State Department of Financial Services for assistance in managing the situation and avoiding collection scams. Learn more here.
- Automobile: Many automobile complaints relate to leasing and New Yorkers should know that they are protected by the strongest auto-leasing law in the country. The law allows consumers to shop around for the best deal when leasing a car, set limits on early termination, and even gives the Attorney General’s Office jurisdiction to resolve excess wear-and-tear disputes. Learn more here.
- Consumer-Related Services: We rely on a range of services in our day-to-day living, from snow-removal to home repair to party planning. Make sure to use a written contract for all services that clearly defines restrictions and obligations of both the consumer and service-provider.
- Landlord/Tenant: Landlords are required to keeping records of all notices, inspections and repair matters related to the residence. This is especially important for issues like lead paint – which was prevalent in the 1960s and poses a significant threat to children. Ask your landlord for documentation to ensure that your building is up to code. Learn more here.
- Mortgage: Mortgage rescue scams prey on homeowners in their greatest time of need. Look out for offers that will stop or delay foreclosure payments for an upfront fee or make payments on your behalf. Beware of companies that suggest a government affiliation or claim to be with the government, or those that work with attorneys but do not provide the services promised. Call our toll free Homeowner Protection Program (HOPP) hotline at 1-855-HOME-456 to find a free non-profit housing counselor or legal services organization that can help you. Learn more here.
- Home Repair/Construction: The biggest and most important investment families will make is their homes, and improvements should add value, not hardship. Before entering into a contract, shop around for estimates, check in with the Better Business Bureau, banks, suppliers and neighbors for references, and know your rights: you have three days after signing a home improvement contract to cancel it. Home improvement contractors must be licensed in New York City, Suffolk, Nassau, Westchester, Putnam, and Rockland Counties. Learn more here.
- Retail Sales: Retail gift cards have become increasingly popular. However, consumers should be careful to buy only from retailers they know and trust. If you buy a card from a company that files for bankruptcy or goes out of business, the card may be worth less than you what they paid. Consumers should also read the rules on the card to know what fees and conditions apply. New rules now provide that money on a gift card cannot expire for at least five years from the date the card was purchased, or from the last date any additional money was added to the card. Inactivity fees can also only be charged if the card has not been used for at least one year. Learn more here.
- Mail Order: Whether ordering online or from a catalog, make sure the company has an operating customer service line and lists a real street address. Companies operating on a ‘fly-by-night’ basis often have no working customer service number and list only a P.O. Box. Learn more here.
- Telecommunications: Consumers should check their landline and wireless phone bills for unauthorized third party charges for non-call related services like email, website hosting, discount buying programs or voicemail services. “Cramming” as this practice is called can occur when companies trick consumers into allowing such charges through sweepstake entries, surveys, websites, and contests. Some businesses use misleading and deceptive ads promising “free” services or products to get your name and telephone number and then charge you for a service you don’t need or want. If you see unauthorized charges on your bill, tell your telephone company that you dispute the charges and ask that they be removed.