Phony IRS Agents and Other Imposter Scams Tops the List of
Phony IRS agents and other imposter scams topped the list of fastest-growing complaints to state and local consumer protection agencies last year, according to the latest report from the annual survey conducted by Consumer Federation of America (CFA) and the North American Consumer Protection Investigators (NACPI).
Thirty-three consumer agencies from twenty-one states participated in the survey, which asked about the most common complaints they received in 2015, the fastest-growing complaints, the worst complaints, new kinds of consumer problems, agencies’ biggest achievements and challenges, and new laws that are needed to better protect consumers.
“If someone 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, Director of Consumer Protection and Privacy at CFA. “Be especially wary if you’re asked to send money immediately or provide personal information that the person should already have – these are danger signs of fraud.” In a new type of imposter scam described in the report, crooks infiltrate the emails systems of companies or organizations and send messages purporting to be from the CEOs to employees with urgent instructions to wire money somewhere.
Scams of all types were also cited as among the worst complaints reported to state and local consumer protection agencies last year. “The consumer agencies we survey are ones that handle complaints about a broad range of problems, from auto sales and service to timeshares and towing, but fraud is especially difficult because scammers aren’t interested in resolving the problems,” noted Amber Capoun, NACPI President and a Legal Assistant in the Office of the State Banking Commission in Kansas.
“By the time consumers complain, the fraudsters have their money, and they intentionally use tactics such as spoofing their Caller ID and email addresses and asking for payment via money transfer services or prepaid cards to make it hard to track them down.” Another new problem that agencies mentioned is the use of iTunes gift cards as a method of payment. Once the scammers get the codes on the gift cards from the victims, they can use those cards to make purchases or sell them on gift-card resale websites.
Top Ten Complaints in 2015
The top complaints were those most frequently cited by the agencies as the most common complaints they received last year.
- Auto. Misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes.
- Home Improvement/Construction. Shoddy work, failure to start or complete the job.
- Utilities. Service problems or billing disputes with phone, cable, satellite, Internet, electric and gas service.
- Credit/Debt. Billing and fee disputes, mortgage modifications and mortgage-related fraud, credit repair, debt relief services, predatory lending, illegal or abusive debt collection tactics.
- Retail Sales. False advertising and other deceptive practices, defective merchandise, problems with rebates, coupons, gift cards and gift certificates, failure to deliver.
- Services. Misrepresentations, shoddy work, failure to have required licenses, failure to perform.
- Landlord/Tenant. Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, illegal eviction tactics.
- Household Goods. Misrepresentations, failure to deliver, faulty repairs in connection with furniture or appliances.
- Health Products/Services. Misleading claims; unlicensed practitioners.
- (Tie) Internet Sales. Misrepresentations or other deceptive practices, 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.
Banning Forced Arbitration and Other New Laws Needed to Better Protect Consumers
The top suggestion for new laws needed to better protect consumers was to ban forced arbitration clauses in consumer contracts. These clauses prevent consumers from taking legal action to enforce their rights and change company behavior. Several federal agencies, including the Consumer Financial Protection Bureau, are considering restricting these clauses. Other suggestions included free credit freezes for consumers on demand, stricter laws against Caller ID spoofing and robocalls, used car lemon laws, and stronger curbs on abusive debt collection.
To read the full report, which provides additional suggestions for new laws as well as descriptions of agencies’ biggest achievements and challenges and tips for how consumers can protect themselves, click here.
The North American Consumer Protection Investigators (NACPI) is an association whose purpose is to provide a medium through which consumer protection investigators, both civil and criminal, of the respective governments (federal, state, county, city, province, district, or territory) receive educational training at annual conferences; network and exchange information; and cooperate in matters involving consumer protection investigations, education, and litigations, of mutual concern to all.
The Consumer Federation of America is a national organization of more than 250 nonprofit consumer groups that was founded in 1968 to advance the consumer interest through research, advocacy, and education.