Attorney General’s Consumer Complaint List Suggests Changes in Internet Commerce

Office Recovered $12.5 Million for Consumers in 2006

SEATTLE – Washington consumers filed 18,354 complaints with the Attorney General’s Office in 2006. Consumers reported fewer complaints about online auctions while communications companies and retailers, which have held the No. 1 and No. 2 spots for at least the last six years, continued to top the list.

The Attorney General’s Consumer Protection Division released its annual Top 20 list of consumer complaint categories today. At the same time, Attorney General Rob McKenna acknowledged the division’s work in recovering $12.5 million for consumers through litigation, complaint mediation, and the Lemon Law program during the 2005-2006 fiscal year.

Online auctions slipped in the rankings from No. 6 to No. 19. Consumers reported 319 complaints about online auctions last year, compared to 774 in 2005 – the first year in which data was available.

Conversely, consumer complaints concerning electronic shopping shot up from No. 9 in 2005, when 532 complaints were reported, to No. 5 last year, when 819 were reported. The category held the No. 3 spot in 2004 and 2003.

Consumer Protection Division staff said the data seems to suggest that more people are shopping online, but the online auction frenzy is waning. A longer period of time is needed to positively identify trends, however; and some of the difference can be attributed to how complaints were categorized. The Attorney General’s Office also noted that complaints about online auction fraud outnumber all other issues reported by Washington state consumers last year to the FBI’s Internet Crime Complaint Center.

“Complaints received by our office suggest that consumers are becoming more careful about bidding for merchandise in online auctions,” McKenna said, “but risk is still there. The Internet is ripe for fraud and some consumers are blindly shopping on sites they are not familiar with. Shoppers should only visit reputable sites in order to ensure trouble-free transactions and reduce the likelihood of becoming victims of identity theft.”

 “Last year, the Attorney General’s Office ramped up our enforcement efforts in a number of important areas including fighting high-tech fraud,” McKenna added. “We started the year by filing our first case under Washington’s Computer Spyware Act and ended the year by settling for $1 million. We’ve since filed four other cases under the anti-spyware statute.”

Also in 2006, the Consumer Protection Division:

• Settled its first federal anti-spam law with two companies accused of blanketing the Seattle School District and nonprofit organizations with junk e-mails.
• Reached a $325 million multi-state settlement with Ameriquest Mortgage Company concerning predatory lending allegations.
•  Settled an important case in the area of consumer health and fitness with the operators of LA Weight Loss diet centers. The substantial increase in consumer complaints about health and diet clubs can be attributed to this settlement, as consumers were encouraged to file complaints with the Attorney General’s Office in order to be eligible for refunds.

The office also expanded its outreach efforts:

• Consumer protection staff made 195 presentations to consumer groups in 2006, reaching more than 13,375 attendees. Identity theft was the most frequently requested topic.
• McKenna created LEGIT, Washington’s Law Enforcement Group against Identity Theft, last year. The group is working on several initiatives to reduce identity theft.
•  McKenna also convened two statewide Latino Consumer Education Conferences, bringing together expert consumer advocates and a diverse group of participants with a shared goal of helping protect Washington’s Latino consumers from fraud. Following that success, Norma Chavez, of the Consumer Protection Division, recently conducted two workshops in Spanish in South Seattle in conjunction with National Consumer Protection Week.
• The Attorney General’s Office, AARP, Microsoft and the Federal Trade Commission teamed up in 2006 to present a Cyber Safety Campaign to educate the public about online hazards such as phishing scams, viruses and spyware.

The Consumer Protection Division is focusing its enforcement efforts on ten key areas considered the most critical to consumers: Internet commerce; privacy and identity theft; senior fraud; automobile sales and the Lemon Law; credit and financial industries; health and drugs; telecommunications issues; charitable solicitations; emergency home repair contractors and emerging marketplace issues.

Top 20 Complaint Categories for 2006

For additional statistics, visit the Attorney General’s Web site at /top-consumer-complaints.

How to File a Consumer Complaint
The easiest way to file a complaint with the Attorney General's Office is by filling out an online form at www.atg.wa.gov. Consumers can also contact the office’s toll-free hotline at 1-800-551-4636 to speak to a complaint analyst and/or have a form mailed. Consumers are encouraged to try to resolve a complaint directly with a business prior to contacting the Attorney General’s Office.

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Media Contact: Kristin Alexander, Public Information Officer, (206) 464-6432