Attorney General's News Release
January 4, 2010
AG Koster announces year's top 10 scams
-- auto service contracts lead consumer complaints --
Jefferson City, Mo. -- Attorney General Chris Koster today released the top 10 consumer complaints and scams reported to his office in 2009. Complaints about businesses that market products as "extended auto warranties" led the complaints, with nearly 1,000 calls to the Attorney General's office from consumers.
"Unfortunately, Missouri has become the Silicon Valley for auto service contract scams," Koster said. "These bait-and-switch schemes thrived by fooling consumers into thinking they were buying true extended warranties for their vehicles. In reality, consumers were getting little, if any, coverage for their money."
The Attorney General has filed suit against 10 of these service contract businesses since November.
Koster noted that the number two scam, mortgage modifications, also included vast promises with no real delivery of services. In April, Koster declared "zero tolerance" against businesses that promise to help consumers decrease their mortgage payments or even prevent foreclosure, but do little or nothing to help them. The Attorney General has filed suit against eight such businesses since April.
The Attorney General's office encourages consumers to file complaints with its Consumer Protection Hotline so the office can help mediate a complaint, investigate scams, and take legal action against businesses if necessary. Consumers can register complaints with the hotline at 800-392-8222 or online at ago.mo.gov.
Below are the top ten scams reported to the hotline in 2009:
- Service Contracts -- This year the Missouri Attorney General's Office received nearly 1,000 complaints from consumers who had received solicitations for or purchased automobile extended service contracts. Consumers complained that advertisements were misleading and attempted to pressure them into an immediate sale, and those who purchased complained of significant, undisclosed limitations on coverage.
- Mortgage Modifications -- The Attorney General's Consumer Complaint Unit received a record number of complaints from consumers who had been charged exorbitant up-front fees by mortgage modification companies in exchange for promises to save their houses from foreclosure. These companies do little or nothing for consumers, while encouraging them to stop making mortgage payments, making foreclosure more imminent.
- Credit Repair/Debt Settlement and Consolidation -- As many credit scores suffered in 2009, many scammers responded with false promises to "fix" consumers' bad credit rating or to erase their bad credit; these are usually nothing more than ways to take consumers' money. Some companies can charge between $50 and $1,000 before any substantive work has been done. The truth is that only time will heal bad marks on your credit, and genuine errors can be fixed for free. If you suspect an error on your credit report, or that your identity has been stolen, contact the Attorney General's Office at 800-392-8222, or fill out our Identity Theft Complaint Form.
- Work-at-Home Scams -- Last year many scammers took advantage of the tight job market by posting advertisements for work-at-home employment that were actually ploys to collect fees for "applications," or "background checks," or to steal consumers' identity information. Beware of any unsolicited job offers, or any that ask you to pay a fee. You can also check Attorney General Koster's KNOW MO website to make sure that you are applying to a reputable company.
Acai Berry "Free" Trial Offers -- The Consumer Complaint Unit received numerous complaints in 2009 regarding "free" trial offers of acai berry advertised by a multitude of companies on the internet. Consumers complained that the offers, instead of being "free" (except for a nominal shipping fee), were actually difficult or impossible to cancel, and ended up costing them a hefty price for the product month after month.
- Mystery Shopper -- Attorney General Koster's Consumer Complaint Unit was contacted by numerous consumers who had received unsolicited pieces of mail, e-mail or phone calls offering them jobs as secret shoppers. While legitimate offers do exist, many scammers may try to use these unsolicited ploys to steal a consumer's identity or take money from customers while delivering nothing in return. Beware any unsolicited offers that seem too good to be true, and never pay in advance to be a secret shopper.
- Card Services Phishing Scam -- In January 2009, Attorney General Koster issued a warning to all Missourians of a phishing scam disguised as an offer to lower their credit card interest rates. The warning followed numerous calls to the Attorney General's Consumer Protection Hotline from consumers who had been contacted, asked to press a number if they wanted to qualify for a better credit card interest rate, and then asked to enter their credit card numbers. Such scams to steal consumers' identity information occur in different forms from time to time, using text messaging as well as the telephone. The Attorney General's office advises consumers not to give out any personal information unless they initiate the call themselves.
- Telephone Cramming -- Telephone cramming occurs when charges from a third party company for unordered or unwanted phone services such as personal 800 numbers, voice mail and calling cards are "crammed" onto a consumer's home telephone bill. It is important to monitor your monthly telephone bill, and, if you notice charges for unwanted services, contact your carrier and request that the charge be removed and the additional service be discontinued.
- Fake Checks -- Attorney General Koster's Consumer Complaint Unit received numerous calls to its hotline from consumers who had received mysterious checks that they believed to be fake. These checks often came in connection with a foreign business or work-at-home offer, or notice that the caller had won a foreign lottery. For more information on how to spot a fake check, you can visit www.fakechecks.org, or call the Missouri Attorney General's Consumer Complaint Hotline at 800-392-8222.
- Grandparent scam - The Attorney General issued a warning this December about this scam, which is aimed at swindling grandparents out of their savings. Koster said the scammers will place a phone call to unsuspecting seniors posing as their grandchild, saying he has been in an accident, is in jail - most often for drunk driving - or that the grandchild is in some other kind of trouble. He said the caller often says that the grandchild is in Canada and asks the grandparent to wire money there via Western Union. The Attorney General's Consumer Complaint unit saw a spike in calls regarding this scam in winter 2009.