10 February – LAWFUEL – The Law News Network – In observance of National Consumer Protection Week, Attorney General Eliot Spitzer today issued an annual “top ten” list of consumer complaints to his office.
For the first time, Internet problems were the top statewide consumer complaint. According to an analysis of more than 51,000 written consumer complaints in 2005, credit and banking complaints were second followed by automobile issues.
“The Internet has become the new Main Street of our society,” Spitzer said. “It has brought great
benefits, but also new opportunities for the unscrupulous.”
Typical Internet-related complaints involve: the non-delivery of goods; incorrect charges for shipped
goods; auctions; spyware; and spam.
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.
In 2005, the work of these bureaus yielded nearly $37 million in restitution through settlements, court
judgments and mediation of consumer-oriented cases. An additional $11.5 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 $4.2 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 2005:
Industry Complaint Numbers
1. Internet 7,723
2. Credit/ID Theft/Debt 6,164
3. Automobiles 5,514
4. Telecommunications 3,372
5. Services 2,897
6. Mail Order 2,558
7. Retail Sales 2,475
8. Home Repair/Construction 2,355
9. Travel 2,075
10. Landlord/Tenant 2,012
This list does not include cases and complaints handled by the Attorney General’s Health Care helpline, which each year receives more than 6,400 calls.
A few of the Office’s major consumer-related cases in 2005 include:
• An important victory in the battle against spyware and adware. Spitzer’s office put an end to a leading Internet marketing company’s widespread practice of secretly downloading adware and spyware onto tens of millions of computers nationwide. Intermix Media agreed to pay $7.5 million in penalties nd profit disgorgement, and accepted a ban on adware distribution. The founder and former CEO of Intermix Media also agreed to pay $750,000 in
penalties and profit disgorgement. An affiliate company, Acez Software, which was
downloading adware with free screensavers, agreed to pay $35,000.
• Three enforcement actions involving the lending industry, aimed at protecting at-risk
consumers from abusive and predatory financing arrangements. The Attorney General’s office secured an important victory when it obtained a court order voiding hundreds of payday loans made by New York Catalog Sales. Another important victory included an appellate decision upholding Spitzer’s case against Cross Country Bank, one of the nation’s largest sub-prime credit card issuers, for predatory credit card practices and illegal debt collection practices. The court ruled that the bank owes thousands of consumers restitution and must pay penalties totaling nearly $8 million. In addition, Spitzer’s office obtained agreements with nine lending companies to reform the business practices involved in cash advances to consumers with pending personal injury litigation.
• The resolution of a lawsuit enforcing the State’s new gift card law. Spitzer’s office had sued the nation’s largest shopping mall chain, Simon’s Property Group, alleging that its mall gift cards fees violated a law that prohibits monthly fees until the thirteenth month of dormancy
and requires disclosures of the other fees such as fees to replace lost or stolen cards.
Simon’s settled the case by agreeing to comply with the law and to pay $125,000 in
penalties and costs.
• The successful defense of New York’s Lemon Law after a consortium of automobile
manufacturers challenged regulations implemented by Spitzer’s office. An appellate court decision upheld the office’s policy that allows arbitrators to rule in favor of the consumer if the consumer provides evidence that a defect in a vehicle was not repaired after four
attempts.
• A lawsuit against Guidant, one of the world’s leading manufacturers of medical devices, for concealing information about a design flaw in a heart defibrillator. The lawsuit alleges that in
February 2002, Guidant discovered a design flaw that caused some defibrillators to short out. After correcting the problem, Guidant continued to sell the defective defibrillators without telling telling doctors or patients.
• Leading a multi-state effort to fight telemarketing fraud. Western Union Financial Services agreed to include very prominent consumer warnings on the forms used to wire money, and pay $8.2 million toward a national consumer awareness program. Scam artists often trick vulnerable consumers into sending substantial amounts of money through sweepstakes, lottery, advance fee loan and other common schemes.
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.oag.state.ny.us.
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A regional breakdown of consumer complaints*:
Albany:
1. Credit (1075)
2. Utilities (1019)
3. Automobiles (650)
4. Miscellaneous (611)
5. Home Const./Repair (532)
6. Mail Order (481)
7. Retail Sales (473)
8. Services (326)
9. Furniture/Major Appliances (166)
10. Subscriptions (127)
Binghamton:
1. Utilities (175)
2. Automobiles (161)
3. Home Repair (133)
4. Credit (124)
5. Retail (115)
6. Miscellaneous (106)
7. Landlord/Tenant (93)
8. Services (77)
9. Direct Mail/Unsolicited Faxes (41)
10. Mail Order (34)
Brooklyn
1. Utilities (378)
2. Landlord/Tenant (258)
3. Automobiles (208)
4. Credit (157)
5. Mail Order (148)
6. Services (120)
7. Retail (118)
8. Miscellaneous (83)
9. Furniture/Appliance (63)
10. Travel (48)
Buffalo
1. Credit (643)
2. Utilities (374)
3. Automobiles (352)
4. Home Repair/Construction (274)
5. Retail (261)
6. Services (254)
7. Miscellaneous (215)
8. Landlord/Tenant (163)
9. Mail Order (140)
10. Internet (137)
Harlem
1. Services (258)
2. Landlord/Tenant (244)
3. Utilities (206)
4. Credit (134)
5. Miscellaneous (89)
6. Automobiles (81)
7. Retail (60)
8. Mail Order (56)
9. Furniture/Major Appliance (51)
10. Health Clubs (30)
Nassau:
1. Credit (333)
2. Automobiles (253)
3. Utilities (191)
4. Furniture/Major Appliance (174)
5. Services (138)
6. Miscellaneous (122)
7. Retail (95)
8. Mail Order (67)
9. Contests/Sweepstakes (60)
10. Mortgages (52)
New York City (Manhattan)
1. Internet (7,723)*
2. Miscellaneous (1971)
3. Credit (1358)
4. Utilities (1142)
5. Mail Order (883)
6. Services (820)
7. Automobiles (766)
8. Retail Sales (538)
9. Landlord/Tenant (396)
10. Travel (319)
Plattsburgh:
1. Credit (609)
2. Telemarketing (277)
3. Mail Order (163)
4. Miscellaneous (86)
5. Automobiles (81)
6. Utilities (70)
7. Home Repair/Construction (55)
8. Services (33)
9. Retail (33)
10. Furniture/Major Appliance (28)
Poughkeepsie:
1. Automobiles (291)
2. Miscellaneous (240)
3. Home Repair/Construction (219)
4. Landlord/Tenant (161)
5. Services (160)
6. Utilities (154)
7. Credit (141)
8. Retail (135)
9. Furniture/Major Appliance (82)
10. Mail Order (70)
Rochester:
1. Travel (1245)
2. Home Repair/Construction (333)
3. Automobiles (289)
4. Miscellaneous (288)
5. Credit (242)
6. Utilities (197)
7. Services (190)
8. Retail (184)
9. Mail Order (112)
10. Landlord/Tenant (108)
Suffolk:
1. Automobiles (293)
2. Credit (198)
3. Mail Order (123)
4. Services (120)
5. Utilities (105)
6. Miscellaneous (94)
7. Retail (92)
8. Home Repair/Construction (57)
9. Landlord/Tenant (38)
10. Furniture/Major Appliance (38)
Syracuse:
1. Automobiles (273)
2. Utilities (226)
3. Credit (202)
4. Home Repair/Construction (200)
5. Furniture/Major Appliance (172)
6. Retail (142)
7. Services (142)
8. Mail Order (97)
9. Landlord/Tenant (90)
10. Miscellaneous (89)
Utica:
1. Utilities (79)
2. Home Repair/Construction (57)
3. Automobiles (55)
4. Credit (47)
5. Miscellaneous (44)
6. Retail (35)
7. Services (33)
8. Furniture (27)
9. Mail Order (24)
10. Landlord/Tenant (16)
Watertown:
1. Automobiles (160)
2. Credit (155)
3. Utilities (118)
4. Landlord/Tenant (84)
5. Home Repair/Construction (67)
6. Services (66)
7. Retail (50)
8. Subscriptions (45)
9. Direct Mail (43)
10. Mail Order (42)
Westchester:
1. Automobiles (246)
2. Credit (228)
3. Utilities (168)
4. Health Clubs (133)
5. Services (129)
6. Miscellaneous (124)
7. Retail (16)
8. Travel (113)
9. Home Repair/Construction (96)
10. Landlord/Tenant (92)
*Because Internet complaints often are not local in nature and are handled out of the Attorney General’s Internet Bureau in Manhattan, complaints associated with the Internet do not generally appear in regional office lists.
