Credit Problems Top Consumer Complaints

In observance of National Consumer Protection Week, Attorney General Spitzer today issued his annual "top ten" list of consumer complaints to his office.

According to an analysis of nearly 55,000 written consumer complaints in 2004, credit and banking complaints - including credit cards, identity theft, debt collection and credit reporting - eclipsed auto-related complaints. Internet concerns continued to receive the third most complaints to the Attorney General’s office.

"Consumers are encouraged to contact my office for assistance in handling disputes with commercial entities and for tips on protecting themselves before making purchases," Spitzer said. "My staff is dedicated to aggressive enforcement against fraudulent and illegal business practices and has an impressive track record in mediating individual consumer complaints."

Similar to statewide numbers, consumers on Long Island complained most about credit issues and automobiles.

The Attorney General’s office - through its Consumer Frauds and Protection Bureau, Internet Bureau and Telecommunications and Energy Bureau - investigates and prosecutes businesses and individuals engaging in fraudulent, misleading, deceptive and illegal trade practices. It also mediates thousands of complaints from individual consumers.

Last year, these three public advocacy bureaus, joined by the Attorney General’s 13 regional offices, were responsible for nearly 120 enforcement actions - including lawsuits and settlements - to protect consumers.

Based on these efforts alone, in 2004, Spitzer’s office obtained more than $18 million in restitution through settlements, court judgments and mediation of consumer-oriented cases. An additional $13 million was recovered by consumers through the New and Used Car Lemon Law Arbitration Programs administered by the Attorney General’s office. The office also collected nearly $4.8 million in civil penalties and costs. The foregoing figures do not include recoveries by the Attorney General’s office in cases brought by other public advocacy bureaus.

The following is a list of top statewide consumer complaints by industry in 2004:

Industry Complaint Numbers

1. Credit 6,724
2. Automobiles 6,255
3. Internet 6,013
4. Telecommunications 5,091
5. Mail Order 2,757
6. Home Repair/Construction 2,610
7. Services (non-auto) 2,512
8. Retail Sales 2,274
9. Landlord/Tenant 2,064
10. Travel 1,639

This list does not include cases and complaints handled by the Attorney General’s Health Care helpline, which each year handles nearly 7,800 calls. A separate report analyzing health care complaints and providing consumer tips is available at the Attorney General’s website at http://www.ag.ny.gov/bureau/healthcare-bureau.

The following is a list of top complaints received by the Nassau and Suffolk Regional Offices.

Nassau Regional Office Suffolk Regional Office
Industry Consumer Industry Consumer
Complaints Complaints

1. Credit 566 1. Automobile 378
2. Automobile 393 2. Credit 198
3. Furniture/Major Appliance 280 3. Mail Order 133
4. Services 184 4. Services 124
5. Telecommunications 128 5. Retail Sales 116
6. Mail Order 100 6. Health Clubs 82
7. Retail Sales 93 7. Telecommunications 68
8. Utilities 66 8. Home Repair/Const. 63
9. Home Repair/Construction 62 9. Furniture/Appliance 57
10. Health Services 58 10. Utilities 37

In 2004, Spitzer’s Nassau and Suffolk Regional Offices handled nearly 4,300 consumer complaints and obtained over $1.3 million in restitution for consumers through mediation efforts and enforcement actions. In addition, these regional offices obtained a total of $265,000 in fines.

Some of the 2004 cases significant in the region include:

• A settlement was reached with Westbury Nissan and Smithtown Nissan, Inc. resolving allegations of deceptive business practices, fraud and false advertising. At least 14 consumers complained that the auto dealerships: increased the agreed upon sale price by adding unwanted options, such as "VIN etching" and extended service contracts without disclosing the add-ons to consumers; refused to return deposits to consumers who exercised their legal right to cancel a contract; and duped consumers into purchasing extended warranties by misrepresenting that the warranties were a requirement to obtain financing. In settling the matter, the dealerships paid $27,000 in consumer restitution and $14,000 in civil penalties;
• Settlements were reached with a dozen Long Island auto dealerships requiring them to clean up their advertising practices. In total, the dealerships paid $57,500 in civil penalties and agreed to advertising reforms with regard to promotions that: advertised "lowest prices" in ads, without clearly disclosing that the prices excluded a range of additional fees; and violated federal advertising regulations by failing to disclose conditions and limitations on offers; and
• A consent order and judgment will significantly reform the sales practices of a popular Long Island furniture retailer and provide restitution to consumers. The judgment permanently enjoins Jennifer Convertibles from engaging in deceptive, fraudulent or illegal business practices, and requires the company to make substantial reforms to its sales practices and customer service operations. The judgment also requires Jennifer Convertibles to make restitution to consumers for its failure to replace or repair defective goods. In addition, Jennifer Convertibles agreed to pay $275,000 in penalties and $2,000 in costs.
• A consent judgment was obtained against AIPCS Systems Technologies, Inc. after an investigation revealed that the Farmingdale-based company failed to deliver goods, failed to provide refunds, failed to return telephone calls and e-mail messages left by consumers, and engaged in deceptive business practices. The judgment enjoins the company from engaging in any business within the State of New York until it files $50,000 performance bond. Additionally, the company is required to pay $15,200 in restitution to known victims and provide an additional $10,000 payment for unidentified consumers. Finally, the company has agreed to pay $15,000 in penalties and $2,000 in costs.

Spitzer noted that his office stands ready to assist consumers in resolving their problems. He encouraged individuals to contact his consumer helpline at (800) 771-7755. Consumers can access a wide range of consumer tips by visiting his website at www.ag.ny.gov.