Imposter scams top the list of worst consumer complaints
"Good morning, this is Internal Revenue Service Agent Sally Smith, and I'm sorry to tell you that you owe the IRS $1,534. Would you like to pay with a credit card or a check?"
First off, it isn't the IRS on the line. And Sally Smith isn't even an IRS agent, nor is she Sally Smith. But it will be a good morning for her - and a bad one for you - if you fall for this scam, said the Consumer Federation of America (CFA).
On Wednesday, the CFA - along with consumer protection investigators from 33 agencies in 21 states - unveiled their yearly survey of the fastest-growing complaints, and not surprisingly, telephone and Internet spoofers topped the list.
"If someone either calls or emails you unexpectedly claiming to be from the IRS, your utility company, a tech support company, or even your employer, don't assume that it's true," said Susan Grant, who heads consumer protection and privacy at the CFA. "Be especially wary if you are asked to send money immediately or provide personal information."
Con artists have always been in business, but they are evolving as new tools become available. These offenders have infiltrated the email systems of companies and organizations to send messages purporting to be anyone from the CEO to employees with urgent instructions to "send money," the CFA report said. Investigators have already seen "crowdfunding" fraud, and the gullible being coaxed into paying with iTunes gift cards which these crooks then reuse themselves. Environmental advocates wanting to "go green" are lured into long term solar power contracts.
Door-to-door salesmen who offer to put on aluminum siding but leave the job half-done are generally relatively easy to deal with and have fallen out of the "Top 10", said Amber Capoun, president of the North American Consumer Protection Investigators, who worked on the survey.
But according to the survey of complaints throughout 2015, the worst of the worst are the fraudsters who use phony emails and constantly rotating telephone numbers to perpetrate IRS and tax ID theft, because they are unreachable and long gone by the time someone realizes they've been defrauded.
The top suggestion for new laws to protect consumers was to ban forced arbitration clauses in consumer contracts because "they prevent consumers from taking legal action to enforce their rights and change company behavior." Other suggestions included free credit freezes on demand for consumers and stricter laws against Caller ID spoofing and robocalls.
The CFA's Grant said it was difficult to draw conclusions on whether consumer fraud had gotten worse, although she noted that there were 200,000 complaints made to these 31 agencies alone. The survey wasn't compulsory, and didn't include every agency that handles consumer complaints.
"It's only a snapshot," she said. But she could have said, a mug shot.
Top Complaints of 2015:
1. Auto. Misrepresentations in advertising or sales about new and used cars, lemons, faulty repairs, leasing and towing disputes.
2. Home Improvement/Construction. Shoddy work and failure to start or complete the job.
3. Utilities. Service problems or billing disputes with cable, Internet, phone, satellite, electric and gas service.
4. Credit/Debt. Billing and fee disputes, mortgage modifications and mortgage-related fraud, credit repair, debt relief services, predatory lending, and illegal or abusive debt collection tactics.
5. Retail Sales. False advertising and other deceptive practices, defective merchandise, problems with coupon, rebates, gift cards and certificates, and failure to deliver.
6. Services. Misrepresentations, shoddy work, failure to have required licenses and to perform contracted work.
7. Landlord/Tenant. Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, and illegal eviction tactics.
8. Household Goods. Misrepresentations, failure to deliver and faulty repairs in connection with appliances or furniture.
9. Health Products/Services. Misleading claims, unlicensed practitioners and failure to deliver.
10. (Tie) Internet Sales. Misrepresentations or other deceptive practices and failure to deliver online purchases.
Fraud. Bogus sweepstakes and lotteries, work-at-home schemes, grant offers, fake check scams, imposter scams and other common frauds.