Debt Issues Top List of Consumer Complaints

Illinois Attorney General Lisa MadiganConsumer debt and identity theft generated the lion's share of more than 27,000 complaints to the Illinois Consumer Protection Division in 2010, Attorney General Lisa Madigan announced today.

Calls about scams involving debt, which includes mortgage lending, debt collection and credit cards, dominated the top 10 list of complaints for the second year in a row, which Madigan said reflects the continuing impact of unemployment, foreclosures and a listless economy.

"The economic crisis continues to affect consumers in Illinois," Madigan (pictured) said in a statement. "People are struggling just to make ends meet. Consumers should know my office is here to help protect them against financial abuse and from con artists who are taking advantage of these tough times to make a quick buck."Below are details concerning the 27,630 formal complaints lodged with Madigan's office in 2010 by consumers affected by scams and fraud, with breakdowns of the top three categories and a full rundown of the top 10 complaints:

Consumer Debt Complaints

Complaints from consumers about mortgages topped list of debt concerns, which also included credit card debt and the availability of short-term, high-interest loans. The top consumer debt issues reported in 2010 include:
  • Mortgage Foreclosure -- More than 3,800 homeowners filed residential mortgage complaints, continuing a 2009 trend as the foreclosure crisis began to explode. Madigan established a Homeowner Helpline (1-866-544-7151) to provide assistance for borrowers facing foreclosure, which has received more than 32,000 calls since October 2008.
  • Collection Agencies -- More than 1,200 consumers called the consumer protection division about collection agencies, which included complaints about abusive tactics, misleading documents and efforts to collect a debt without verifying the identify of the consumer.
  • Credit Card Companies -- More than 700 consumers contacted Madigan's office for help with credit card debt, including problems with credit card balance transfers, introductory rate offers and excessive interest rates.
Identity Theft Complaints

Identity theft complaints totaled 3,861 in 2010, and most consumers took advantage of the state's Identity Theft Hotline (1-866-999-5630), which has logged more than 29,000 calls since February 2006. Many identity theft complaints involved:
  • Credit cards – Some 1,082 complaints included reports of fraudulent charges to existing accounts and identity thieves opening new credit card accounts in the names of their victims.
  • Utility companies – A total of 527 consumers complained about fake cell phone, gas and electric accounts opened in their name.
  • Bank fraud – Some 355 consumers complained of stolen checks, unauthorized withdrawals and new bank accounts opened in their name.
Top 10 Consumer Complaints in 2010
  1. Consumer debt (mortgage lending, collections, credit cards) 7,035
  2. Identity theft (fraudulent credit cards and utility accounts, bank fraud) 3,681
  3. Construction, home improvement (remodeling, roofs/gutters) 2,175
  4. Telecommunications (wireless service, local phone service, cable/satellite) 1,917
  5. Motor vehicles/used auto sales (as-is sales, financing, warranties) 1,345
  6. Promotions and schemes (sweepstakes, pyramid, work-at-home schemes) 1,137
  7. Mail order (Internet purchases, catalog ordering, television/radio) 1,043
  8. Fraud against business (consulting, directories/publications) 982
  9. Motor vehicle/non-warranty repair (collision/body, engines) 688
  10. Travel (promotions/sales, time shares, travel agents) 629
Madigan's office also announced a lawsuit filed against Chicago-based Legal Helpers Debt Resolution, a national legal firm. The suit accuses the law firm of illegally charging upfront fees to consumers for worthless debt settlement services that left them even deeper in debt.

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