Tag Archives: consumer complaints

Mar 6 2021

Income Illusion

With record unemployment and the ongoing financial impact of the pandemic, many Americans are struggling to make ends meet — and scammers are pitching income scams with false promises of success and financial security.

In a typical pitch, scammers state that you can make a lot of money, for example, working from home with little time and effort, or starting your own online business. But those promises of big money are all an income illusion. In fact, in the first nine months of 2020 alone, Americans reported to the FTC that they lost at least $150 million. The total amount of alleged losses is over $1 billion.

Sometimes these scammers focus their pitches on particular communities.  In one case, a work-from-home scam targeted Latinas through Spanish language TV ads. In another case, an alleged investment scam affected older adults, retirees, and immigrants. And even veterans, students, and college-age adults are targeted with a business coaching scam.

The Federal Trade Commission (FTC) found in income scams the average loss was less than $500. Americans who lost money were 44% more likely to live in majority Black communities.

How to Spot an Income Scam

Everyone can be targeted by income scams.  A scammer’s offer may tell you that:

  • Make money selling in your community. Be your own boss.
  • Learn from the experts how to generate guarantee income.
  • You got the job! Deposit this check and send money or buy gift cards.
  • Work from home and make money with little time and effort!
  • Just recruit more people to make big money!

Before you accept a business offer:

  • Take your time

Avoid high pressure sales pitches that require you get involved now or risk losing out.

  • Be skeptical about success stories and testimonials.

Glowing stories could be fake and online reviews may have come from made-up profiles.

  • Don’t bank on a “cleared” check.

If you’re told to send some money or buy gift cards, you can bet it’s a fake even if you see the   money in your account.

  • Do your research.

Search online for the company’s name plus words like “review,” “scam,” or “complaints.

For more information, click here.

Teaching Suggestions

  • Ask students if they, their friends, or families have received such offers from scammers. If so, how did they respond?
  • Ask students what they would personally do to fight income scams and help people recognize and avoid them.

Discussion Questions

  1. Why do scammers focus their pitches on particular communities?
  2. Why is it important to search online for company’s name plus words like “review”, “scams”, and “complaints” before making a decision”?
Oct 21 2017

Those Pesky Robocalls

Every day American consumers report tens of thousands of illegal robocalls to the Federal Trade Commission, and now the FTC is helping put that information to work boosting industry efforts to stop unwanted calls before they reach consumers.

Under a new initiative announced by the FTC, when consumers report Do Not Call or robocall violations to the agency, the robocaller phone numbers consumers provide will be released each day to telecommunications carriers and other industry partners that are implementing call-blocking solutions.

Unwanted and illegal robocalls are the FTC’s number-one complaint category, with more than 1.9 million complaints filed in the first five months of 2017 alone. By reporting illegal robocalls, consumers help law enforcement efforts to stop the violators behind these calls. In addition, under the initiative announced today, the FTC is now taking steps to provide more data, more often to help power the industry solutions that block illegal calls.

For more information, click here.

Teaching Suggestions

  • Ask students if they have received robocalls and what was their response to such illegal calls?
  • Let students debate the issue of whether robocalls should be outlawed.

Discussion Questions

  1. Why is the consumer complaint data so crucial for the FTC to call-blocking solutions?
  2. How will the FTC attempt to stop unwanted robocalls before they reach consumers?
Aug 13 2016

Scams, Frauds, and Consumer Complaints

Based on a recent study, chip-enabled cards used without appropriate technology and tax ID theft are the fastest-growing and most costly consumer complaints.  People are often contacted by someone claiming to be from the IRS, a utility company, or a tech-support company, and asked to send money or provide personal information. This is a common danger sign of fraud as reported in a recent study of consumer complaints by the Consumer Federation of American and the North American Consumer Protection Investigators.

This report identified the following as the top ten most common sources of consumer complaints:

  1. Motor vehicle misrepresentations in advertising along with sales of new and used cars, lemons, faulty repairs, leasing and towing disputes
  2. Home improvement, such as inferior work, and failure to start or complete the job
  3. Utility service problems and billing disputes
  4. Credit and debt concerns, such as billing and fee disputes, mortgage fraud, credit repair, debt-relief services, predatory lending, abusive debt-collection tactics
  5. Retail sales problems related to deceptive ads, defective goods, problems with gift cards and certificates, rebates and coupons
  6. Services with poor or incomplete work, lack of licensing
  7. Landlord-tenant concerns, such as unsafe or unhealthy conditions, lack of repairs, and unfair eviction
  8. Furniture, appliances, and household products that are faulty or not properly repaired
  9. Health products and services with misleading claims
  10. Fraud and scams, such as phony sweepstakes, work-at-home schemes, deceptive online sales

Two additional recently reported scams are the “grandparent scam,” in which a phony grandchild calls an older person claiming to need quick cash for an emergency.  With the CEO scam, employees are contacted with what appears to be an email from their company asking them to wire money to a foreign supplier for a deal that needs to close immediately with a promise to be reimbursed.

For additional information on current frauds and scams, go to:

Link #1

Link #2 

Teaching Suggestions

  • Have students present a talk with actions that might be taken to avoid consumer scams.
  • Have students create a list of common consumer complaints among their friends.

Discussion Questions 

  1. Why are people often victims of consumer frauds?
  2. What are common suggestions for avoiding various consumer scams and frauds?
Apr 4 2015

Reverse Mortgage Complaints

Reverse mortgages are a special type of loan that allows homeowners, 62 and older, to borrow against the accrued equity in their homes.  Reverse mortgages can help some older homeowners meet financial needs, but they can jeopardize retirement security if not used carefully.

In February 2015, the Consumer Financial Protection Bureau (CFPB) released a report that some homeowners have experienced problems with reverse mortgages.  The most common reverse mortgage complaint is about difficulty with changing the loan terms and problems communicating with loan servicers.  Some consumers, for example, express frustration about slow, inconsistent communication from their reverse mortgage loan servicer.

If you are having a problem with your reverse mortgage or having problems getting through to your mortgage servicer, you can submit a complaint to CFPB online or by calling (855) 411-2372 or TTY/TDD (855) 729-2372.  The CFPB will forward your complaint to the company and work to get you a response within 15 days.

For additional information, click here.

Teaching Suggestions:

  • How can a person access funds from a reverse mortgage?
  • Ask students what other alternatives might be available before settling for a reverse mortgage?

Discussion Questions

  1. What is the purpose of a reverse mortgage?
  2. Can people with very low equity in their home qualify for a reverse mortgage?
  3. How can people protect themselves from dishonest reverse mortgage providers that charge exorbitant fees?
Jul 19 2014

Consumer Action Handbook

How can a person contact an auto manufacturer with a concern about a motor vehicle? Where would a person file a complaint about deceptive investments? What state consumer protection agencies are available to help consumers in Missouri?

These, and many other, questions are answered in the Consumer Action Handbook, published by the U.S. General Services Administration. Updated each year, this free reference book offers consumer buying tips on everything from consumer credit and environmental-friendly products to travel and utilities along with extensive lists of contact information for major companies, trade associations, and federal, state, and local consumer agencies.

The Consumer Action Handbook may be accessed at::

online version – http://www.usa.gov/topics/consumer/consumer-action-handbook-online.shtml

download version – http://www.usa.gov/topics/consumer/consumer-action-handbook.pdf

order form for print copy – http://www.usa.gov/consumer-action-handbook/order-form.shtml

video – https://www.youtube.com/watch?v=eHhm5arq1RY

Teaching Suggestions

  • Have students obtain a copy of the Consumer Action Handbook (print or PDF version) and have them select information about which they were not previously aware.
  • Have students talk to others to determine their main sources of consumer information when making a purchase or when having a consumer complaint.

Discussion Questions 

  1. Why do an extensive number of consumer problems occur in our society?
  2. Explain the actions a person might take when encountering a consumer complaint.
  3. In addition to the Consumer Action Handbook, what information sources might consumers use when planning a purchase or encountering a consumer problem?