Top 10 Frauds of 2016 in New York: Report

NEW YORK — Thousands of New Yorkers reported consumer fraud to the New York Attorney General's office in 2016. So to kick off National Consumer Protection Week, Attorney General Eric T. Schneiderman released his annual list of the top 10 consumer fraud complaints his office received.

He also offered a variety of tips on how to avoid scams in the future.

“This serves as a reminder: fraudsters are always looking for ways to line their pockets at the expense of unsuspecting consumers,” said Schneiderman said in the announcement. “The best weapon against scams is an informed consumer – and the law. I encourage New Yorkers to report fraud, and my office will continue its long tradition of vigorously enforcing New York’s strong consumer protection laws.”

For the 11th year in a row, Internet-related complaints topped the list with 4,605 complaints. Internet-related complaints were closely followed by complaints about automobile sales, service, financing, and repairs.

Many of the car-related complaints were filed by Volkswagen consumers after Attorney General Schneiderman announced an investigation into Volkswagen’s installation of software devices that caused its diesel vehicles to cheat environmental pollution tests. The office participated in an interrelated series of partial settlements with Volkswagen and its Audi and Porsche affiliates that provided unprecedented relief, including enabling over 21,500 New York car owners to sell their cars back to the companies at pre-scandal, fair market value, plus receive a cash payment of at least $5,100.

Consumer-related services, which include complaints about restaurant/catering services, tech repairs, dry cleaners, furniture repair, and hair and nail salons, ranked third on this year’s list, followed by Landlord/Tenant complaints that include allegations of tenant harassment. Utilities-related complaints, which include complaints about cable and satellite companies, energy services and suppliers, and wireless phone carriers, rounded out the top five.

Here's the 2016 list of the top 10 consumer complaints by category and number of complaints:

1. Internet

4,605

(internet services & service providers; data privacy & security; consumer frauds)

2. Automobile

3,437

(buying, leasing, repair, service contracts, rentals)

3. Consumer-Related Services

2,444

(security systems; restaurant/catering services; tech repairs)

4. Landlord/Tenant Disputes

2,005

(Security deposit releases, tenant-harassment)

5. Utilities

1,730

(Wireless and Residential Phones; Energy Servicers & Suppliers; Cable and Satellite)

6. Credit

1,606

(debt collection; credit card billing; debt settlement; payday loans; credit repair; credit reporting agencies; identity theft)

7. Retail Sales

1,214

(any sale of goods: food, clothing, rent-to-own)

8. Home Repair/Construction

1,069

(home improvement services not delivered or done poorly)

9. Mortgage

921

(mortgage modifications; mortgage and loan broker fraud; foreclosures)

10. Mail Order

715

(purchases made online or from a catalog)

The Attorney General also offered a list of tips all consumers should use to protect themselves and their families:

1. Internet: We depend on reliable Internet service. Click here to determine which questions you should ask to choose an Internet plan appropriate for your needs and to gain access to tools to test whether you are getting the Internet speeds you were promised. If you are not receiving the speed you are paying for, call your Internet service provider.
2. Automobile: This year the Attorney General celebrated the 30th anniversary of New York’s New and Used Car Lemon Laws, which provide a legal remedy for buyers or lessees of new cars that turn out to be lemons. The arbitration program was extended to used cars three years after introduced. You may be entitled to a full refund if your car does not conform to the terms of the written warranty and the manufacturer or its authorized dealer is unable to repair the car after a reasonable number of attempts. The law allows consumers to shop around for the best deal when leasing a car, set limits on early termination, and gives the Attorney General’s Office jurisdiction to resolve excess wear-and-tear disputes. Since 1987, over 30,000 new car applications were filed resulting in over 20,000 dispositions through either an arbitration award or a settlement. The 30-year total recoveries to consumers from the new car program are estimated to be in excess of $245 million and an estimated excess of $39 million from the used car program. To file a new or used car “lemon law” complaint, click here and here.
3. Consumer-Related Services: We rely on a range of services in our day-to-day living, from snow-removal to home repair to party planning. Make sure to use a written contract for all services that clearly defines restrictions and obligations of both the consumer and service-provider.
4. Landlord/Tenant Disputes: The Attorney General’s Tenant Harassment Task Force investigates situations where landlords and management companies are suspected of using construction as a means to harass tenants. Incidents of harassment include: landlords operating without proper permits; construction projects operating in violation of stop work orders; and landlords who openly ignore requirements for tenant protection plans in order to contain the spread of lead and/or asbestos which may be exposed during renovation. Tenants may lodge complaints by completing and submitting a Tenant Rights Complaint Form or calling 1-800-771-7755.
5. Utilities/Wireless and Residential Phone Service: A common complaint with long-term wireless service contracts involves the sometimes hefty price for cancellation. Some contracts charge hundreds of dollars. If you are unsure exactly what plan best fits your calling habits, and want to avoid paying a large termination fee, it might be best to avoid an extended contract. Regardless of the length of your contract, remember to carefully read and understand all terms before signing it. Learn more here.
6. Credit: Debt collection is the most common type of credit fraud, and consumers must know their rights. Debt collectors may not harass or abuse consumers, nor provide misleading information – for instance claiming to represent a government agency. Debt collectors cannot sue on debts outside the applicable statute of limitations, the time frame established for the enforcement of legal rights. Consumers have the right to demand verification of the debt. Anyone with credit problems should contact credit counseling agencies licensed by the New York State Department of Financial Services for assistance in managing the situation and avoiding collection scams. Learn more here.
7. Retail Sales: Check return and refund policies.The law requires all merchants to post their refund policies. A store that fails to do so must give consumers 30 days to get a refund in the manner that the purchase was made. Be especially vigilant of “final sales” or “cash-only – final sale” notices, as you will have little or no recourse if the merchandise proves to be defective. Some stores require the original packaging and charge a hefty restocking fee for returned items. Learn more here.
8. Home Repair/Construction: The biggest and most important investment families will make is their homes, and improvements should add value, not hardship. Before entering into a contract, shop around for estimates, check in with the Better Business Bureau, banks, suppliers and neighbors for references, and know your rights: you have three days after signing a home improvement contract to cancel it. Learn more here.
9. Mortgage: Mortgage rescue scams prey on homeowners in their greatest time of need. Look out for offers that claim to stop or delay foreclosure payments for an upfront fee or make payments on your behalf. Beware of companies that suggest a government affiliation or claim to be with the government, or those that work with attorneys but do not provide legal services. The Attorney General’s Homeowner Protection Program (HOPP) funds a network of more than 85 trusted partners dedicated to providing homeowners with free, qualified mortgage assistance relief services across New York. To find a nearby HOPP provider, visit agscamhelp.com or call the Attorney General’s hotline at 1-855-HOME-456.
10. Mail Order: Whether ordering online or from a catalog, make sure the company has an operating customer service line and lists a real street address. Companies operating on a ‘fly-by-night’ basis often have no working customer service number and list only a P.O. Box. Learn morehere.

Schneiderman reminds New Yorkers that in addition to being vigilant consumers, they should also report instances of fraud to his office. Consumers are encouraged to file complaints to the Attorney General’s office by completing and submitting a Consumer Bureau Online Complaint Form or calling 1-800-771-7755.

Image via Shutterstock