By Melissa Dunson
Complaints about financing, and credit and debt collection in 2008 topped the Missouri Attorney General’s list of most common consumer complaints in the state for the second year in a row.
Scott Holste, spokesman for Attorney General Jay Nixon’s office, credits that trend to the economic crisis affecting the entire country. In 2003, 2004 and 2005, telephone slamming, cramming and billing took the No. 1 spot in annual complaints.
“As the country is experiencing this economic downturn, more people are finding themselves in financial straits, and they are more likely to become victims of financial schemes,” Holste said.
Included in that top spot is mortgage fraud, related to the meltdown in the housing market, Holste said. Nixon’s office received nearly 5,500 complaints in the financial-fraud category last year.
In July, Nixon’s office launched Operation Stealing Home, a series of lawsuits alleging mortgage fraud and other scams that claimed to help homeowners facing foreclosure.
The current national economic situation also contributed to Missouri’s second largest number of consumer complaints: Financial fraud, lotteries and general scams.
“Consumers should realize that if they are in dire straits, it’s going to take time to get out of it and there are no easy solutions,” Holste said. “But unfortunately, a lot of people are promising (quick fixes).”
The other top 10 complaint categories for 2008 are auto sales, repair, odometer, title and towing with 3,989 complaints; telephone slamming, cramming and billing with 1,961 complaints; home repair and construction with 1,795 complaints; cable, satellite and Internet service providers with 1,341 complaints; health spas and health clubs with 1,218 complaints; travel clubs, timeshares and travel-related promotions with 1,213 complaints; identity theft with 1,129 complaints; and pre-need burial plans, funeral homes and cemeteries with 546 complaints.
Complaints from the Joplin area followed that trend, Holste said. Of the 227 complaints the Attorney General’s office received from residents inside Joplin’s city limits, Holste said one-third of them related to financing and credit.
Holste said one of the biggest actions Nixon took in the Joplin area last year was warning people about construction fraud following the devastating F-4 tornado that struck Newton County on May 10. Another action involved a permanent injunction and nearly $32,000 judgment against Joplin resident Derrick Gates, also known as Derrick Badders, for promoting events that never happened and not refunding money to participants.
Holste said the Attorney General’s office received a record setting 120,000 complaints last year via calls, letters, e-mails and online submissions regarding possible consumer fraud. That is a 20 percent increase over the last two years, he said.
Holste attributes that increase largely to the recent addition of online complaint forms and e-mail submissions.
“People like the ease of doing that and it’s become a basic way for people to communicate with their government,” he said.
During 2008, Nixon’s office recovered $15.5 million in consumer restitution, including a record setting $9.5 million through informal, non-trial mediations. Division attorneys obtained 11 criminal convictions, 29 assurances of voluntary compliance and 36 civil judgments in civil cases in 2008.
In addition, the Consumer Protection Division of Nixon’s office obtained judgments of $722,000 in penalties for Missouri schools, $3.5 million for consumer law enforcement and consumer education, and $200,000 for antitrust law enforcement.
Holste said senior citizens continued to be the group most susceptible to consumer fraud and scams, especially in the areas of home repair and investment schemes.
“They come from a generation where they trusted someone at their word and, unfortunately, con artists take advantage of that,” he said.
Democratic Missouri Attorney General Jay Nixon’s inauguration as the 55th governor of Missouri is scheduled for Jan. 12 at the state Capitol building in Jefferson City. Nixon defeated U.S. Rep Kenny Hulshof in November by carrying 70 of the state’s 116 voting districts. State Sen. Chris Koster, D-Harrisonville, was elected in November to take Nixon’s place as Missouri Attorney General.
By Melissa Dunson