Attorney General's News Release

December 28, 2007

Financial fraud, credit and debt issues top list of consumer complaints to Attorney General’s Office in 2007

Use Know Mo to search consumer complaints

Jefferson City, Mo. — Consumer complaints about financing, credit and debt collection were the number one category of complaints to the Consumer Protection Division of Missouri Attorney General Jay Nixon’s office in 2007. Nixon today released his annual “Top 10” list of consumer complaints from the approximately 100,000 calls, letters, e-mails and online complaints that came into his office in the past year.

The finance category of complaints retained the top spot in 2007 for the second straight year. From 2003 to 2005, telephone slamming, cramming and billing was the lead category on Nixon’s list.

The complete Top 10 list of complaints for 2007, along with examples of legal action, includes:

• Financing, credit and debt collection (5,324 complaints). Among the legal actions Nixon took during 2007 on these types of complaints was a consent judgment obtained against a Joplin furniture store that closed its doors without delivering furniture ordered and paid for by hundreds of consumers. Nixon’s quick action resulted in consumers receiving furniture deliveries valued at approximately $337,000. Nixon also obtained $78,000 in restitution for Missouri farmers defrauded by a major grain marketer, and took action against a Jackson County payday loan business to stop it from offering unsecured loans and collecting fees from consumers without a license.
• Auto sales, repair, odometer, title and towing (2,375). Nixon shut down a St. Louis towing and recovery business for 10 years and obtained $91,000 restitution for consumers; took action in Greene County against a southwest Missouri vehicle customizing business that allegedly took thousands of dollars in consumer payments without finishing jobs; and obtained a preliminary injunction against a Kansas City auto dealership that continued to operate after the dealer’s license was revoked.
• Gasoline prices and storm-related price gouging (2,102). Winter ice storms in Missouri led to Nixon lawsuits against various businesses that charged excessive prices for gasoline, kerosene, generators, motel rooms and tree-trimming services. Approximately 400 consumers filed complaints alleging price gouging in communities along the I-44 corridor between Joplin and Lebanon against various businesses, leading to five Nixon lawsuits and nine settlements that recovered almost $170,000 in consumer restitution, penalties and payments to the state.
• Telephone slamming, cramming and billing (1,980). Nixon obtained a judgment against an Anaheim, Calif. company prohibiting it from continuing to send Missouri businesses and consumers solicitations in the form of “activation checks” that would trigger monthly charges to the recipients, along with refunds for consumers and $10,000 to the state for costs.
• Home repair and remodeling (1,624). A St. Louis contractor who defrauded home owners pleaded guilty to 11 counts of criminal unfair merchandising practices and was ordered to pay $55,881 restitution; another St. Louis contractor pleaded guilty to four felony counts of unlawful merchandising practices and was ordered to pay $72,033 in restitution. Other home repair contractors from around the state were ordered to pay $110,925 and $18,000 in cases brought by Nixon. Nixon also is suing a Texas company that took tens of thousands of dollars to build log homes for consumers and then produced shoddy, incomplete work.
• Lotteries and sweepstakes (1,505). Promoters of a high-profile raffle in Kansas City were ordered to pay restitution and penalties of more than $100,000 after Nixon sued, seeking refunds for consumers who bought tickets to the raffle that was never held.
• Identity Theft (1,296). Nixon’s office initiated and handled an 18-month investigation involving federal authorities that resulted in the indictment of seven people on charges of stealing identity information from mid-Missourians to set up phone service to communicate with inmates in state correctional facilities.
• Travel clubs, timeshares and travel related promotions (1,108). Operators of a southwest Missouri travel club were prohibited from participating in the travel club industry and ordered to pay a total of $1.35 million to the state, including $700,000 restitution and $650,000 in penalties and costs, in a settlement reached by Nixon.
• Computer software, online services and internet auctions (1,018). Nixon lawsuits led to a Clayton Internet lingerie business being ordered to pay $22,863 in consumer restitution, and an Imperial Internet advertising business having to pay more than $24,000 for defrauding several small businesses by selling Internet advertising based on false guarantees.
• Charitable organizations (822). Nixon obtained a $2 million default judgment against a charity based in St. Louis that deceptively solicited sales of raffle tickets for major prizes that were not awarded.

Search consumer complaints with Know MO

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818