The FTC received more than two million consumer complaints last year, with problems ranging from identity theft to credit card rip-offs. Here are the top 10 problems and simple solutions for each.
The Federal Trade Commission (FTC) received more than two million complaints in 2012, the first time they’ve topped two million in one year. Nine of the top 10 were repeated from last year.
While record numbers and consistent complaints might not sound like good news, there’s a bright side: Learning solutions to recurring problems allows simple protection.
Money Talks News founder Stacy Johnson produced the following video about the top five complaints; check it out, then read on for more.
Here’s the complete list of the FTC’s top 10 consumer complaints of 2012 along with tips to help prevent becoming a statistic.
1. Identity theft
Identity theft comes in many forms, and tops the 2012 list with 369,000 complaints – about 18 percent of the total.
There are many ways your identity can be stolen, but about half the complaints were associated with tax- and wage-related fraud.
To help avoid tax scams, file early, use a trusted tax preparer, and send returns electronically. For more, read our story about six common tax scams.
Tax time is also a good time to check your credit reports by requesting free copies at annualcreditreport.com. If someone’s opened an account in your name, this is how you’ll catch it.
Be careful with your Social Security number. Shred documents with sensitive information before throwing them out.
Check out our post with more ways to prevent and recover from identity theft.
2. Debt collection
Debt collectors have earned a reputation for being ruthless. They call, send messages, and sometimes use illegal tactics to get you to pay. They were responsible for about 10 percent of consumer complaints in 2012.
If you’re sick of being called, read advice to make them stop.
3. Banks and lenders
Problems stemming from banks and other lenders spawned more than 132,000 complaints last year.
Read over everything before signing on the dotted line. If you’re not willing or able, ask a friend who is. The bigger the potential for problems, the more important this becomes – for example, mortgages.
When it comes to bank fees, before you open an account, make sure you understand what the charges will be. After you open an account, read your mail: If terms change, banks should notify you.
Before opening any bank account, use our tips to lower banking fees. If you’re charged a fee you believe is unfair, call customer service. If it’s still unresolved, submit a complaint to the Consumer Financial Protection Bureau.
Before entering into a mortgage, check out our archive of posts for help with numerous potential problems.
4. Shop-at-home and catalog sales
Shopping from home saves a trip to the store, but about 115,000 consumers complained about these transactions last year.
Primary problems? Not getting what you expected, or not getting anything at all.
Before you buy, investigate the retailer. Check with the Better Business Bureau or do a search for the business name and “complaint.” When in doubt, stick to merchants you trust.
Always use a credit card and check return policies before you buy. Find out how long you have to send items back and how return shipping works.
If your stuff never shows up, file a dispute on your credit card.
5. Prizes, sweepstakes, and lotteries
If you get an email or postcard telling you to “Claim your prize!”, there’s a good chance it’s a scam. About 5 percent of consumer complaints fall into this category.
One way to tell: When you attempt to collect your winnings, you’re asked to pay taxes or fees. Just say no. The FTC says legit sweepstakes and lotteries don’t charge fees to claim a prize.
Most promoters offering real prizes identify their company prominently, while scammers might hide their identity. Watch for lookalike names of reputable and trustworthy businesses.
As for postcards and letters: It’s unlikely you won a “big” prize if it was mailed at a bulk rate, so check the postage.
6. Impostor scams
Scammers prey on the trust of consumers by posing as authorities, your bank, the IRS, and even friends and family. Almost 83,000 complaints about impostors were fielded by the FTC in 2012.
Use the FTC’s advice for spotting impostors: Watch for fakes, and don’t assume calls and letters are from places you trust. Be cautious giving out any personal and financial information when a caller or email asks for it.
When in doubt, initiate contact on your end by using the contact information on the company’s bill or website instead.
Finally, don’t fall for fake emails from a “friend” who’s trapped in London (or anywhere else).
7. Internet services
Ever had computer problems with spyware, malware, and antivirus software you can’t uninstall? About 81,000 people complained about similar issues last year.
Make sure you understand what you’re installing before you click, as it could be one of these common Internet scams. Sketchy sites can harm your computer and steal information. Uninstalling malware can be a huge hassle too.
8. Auto-related complaints
According to a Gallup poll, car salesmen are among the least-trusted professionals, so there’s little surprise this industry made the list. The roughly 78,000 FTC complaints last year account for 4 percent of the total.
Heading to the mechanic or car dealership armed with knowledge is the key to avoiding rip-offs.
Before shopping for a car, read Tricks of the trade: Car Dealers to learn what to watch for, from bait-and-switch sales to a bad deal on financing.
Then there’s maintenance. When getting an oil change, watch for costly and unnecessary up-sells. When looking for a mechanic, get recommendations from friends and family and check out “19 Tips for Finding a Great Car Mechanic.”
9. Telephone and mobile services
Almost 77,000 consumers filed an FTC complaint about phone-related issues last year.
Toll-free calls that aren’t free and other phone scams fall into this category. Remember, numbers starting with “900” aren’t toll-free.
10. Credit cards
Credit cards round out the top 10 with more than 51,000 complaints in 2012. This category includes a wide range of disputes with credit card issuers, from billing problems to interest rate hikes.
Stay up to date on the latest credit card scams, and always look over your statement and challenge suspicious charges.
Watch for sneaky credit card fees buried in the fine print. Check out Tricks of the Trade: Credit Cards to avoid bad deals.
File one of these complaints yourself? Let us know about it on our Facebook page.