Avoiding the complaint department as a smart consumer

The Consumer Federation of America and the North American Consumer Protection Investigators this week released their annual list of the most common, fastest-growing, and worst complaints made to state and local consumer protection agencies.

There’s no denying that investors and consumers have plenty to complain about.

In fact, looking at what people complain about the most holds some valuable lessons, especially if you don’t want to wind up in the same boat.

Perhaps the biggest lesson is to spend enough time taking care of your money, because it will cost you time and money if a financial decision goes horribly wrong. Rushing into the financial actions that lead to the most complaints is likely to lead you down the exact same path yourself; if you don’t want to be part of the complaint statistics in the future, you should learn what they are telling you now.

The list released last week by the consumer-protection groups isn’t all financially related, but it’s the starting point for anyone looking to become a better-informed consumer. (And every consumer can benefit from knowing when they might be headed into the danger zone.)

According to the groups, the top 10 categories for complaints were:

1. Autos: Misrepresentations in ads or sales of new and used cars, repairs, leases and more.

2. Credit/debt: Billing and fee disputes, fraud related to mortgage lending and “mortgage modifications,” problems with credit-repair and debt-relief services, predatory lending and illegal or abusive debt-collection tactics.

3. Home improvement/construction: Poor-quality work, failure to start or finish the job.

4. Retail sales: False or deceptive advertising practices, problems with rebates, coupons, gift cards and certificates and more.

5. Utilities: Service problems or billing disputes.

6. Services: Misrepresentations, failure to have required licenses, failure to perform properly or, in some cases, at all.

7. (Tie) Internet sales: Deceptive practices, misrepresentations, failure to deliver.

Landlord/tenant disputes: Unsafe and/or unhealthy conditions, failure to provide promised amenities or make promised repairs, deposit or rent issues, and improper eviction tactics.

8. Fraud: Bogus sweepstakes and lotteries, work-at-home schemes, grant offers, and other common frauds

9. Real estate: Timeshare sales and re-sales; sales tactics or failure to deliver on promised services at retirement communities and assisted living facilities.

10. (Tie) Household goods: Faulty repairs on furniture or appliances, misrepresentations, and more.

Home Solicitations: Failure to deliver in door-to-door, telemarketing or mail solicitations, misrepresentations made in sales pitches. Read more about the top consumer complaints.

Among the new consumer problems that agencies were dealing with – but which failed to make the most-common list – were problems with penny auctions on the Internet, with companies offering cash for gold and more.

Susan Grant, director of consumer protection for the Consumer Federation of America, noted that a lot of these problems – but particularly the most daunting financial issues – could be solved by taking a little more time to do the job right.

While she wasn’t blaming consumers for the jams that lead to consumer complaints, she said that it’s fairly easy to not get caught in these situations, especially when it comes to financial issues such as mortgages, gold sales, real estate investments and other transactions. “The appeal of so many of these things is that someone calls and says, ‘We’ll do all the work for you,’ and that’s really appealing because you want to sell the time-share or sell some old gold or fix the problem with your mortgage or improve your credit, but you’re also really busy,” Grant said.

“There’s just not enough hours in the day between work and families and everything we have to deal with,” she added, “so you consider yourself lucky to have someone call you who is offering to help. It’s all great until it falls apart. And all too often, according to the complaints, it does.”

Functionally, the trap consumers fall into is feeling as if Providence has smiled upon them. What they don’t recognize is that they are not getting the cold calls, spam emails or mailed solicitations by accident. They’re hearing about credit-repair or being offered help on selling an unused time-share because their financial data is readily available for the marketers to use.

“If you get contacted out of the blue and you are tempted, you should at least do your homework, find out about who else can offer you similar services and learn enough to know that you aren’t being led astray,” Grant said.

Ultimately, that means taking control of the process. That means comparison-shopping, vetting any service provider, checking backgrounds and processes and learning up front what you might have to complain about if things go wrong later.

Rather than being sold a mortgage modification or pitched on how to make the most of the unused time-share, learn how the process works, so that you are on solid footing with any service provider.

Without that preparation, you won’t know until it’s too late if you are getting what you pay for or something to complain about.

“People say they don’t have the time to complain, or they think ‘It’s not that much money, so I’ll take a chance,” Grant said. “Well, unless you want to run the risk that you will have time later to do the complaining or go through the fight to get your money back, you had better do your homework up front.”