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Ginnie Graham: Avoid being scammed during the pandemic

Ginnie Graham: Avoid being scammed during the pandemic

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The COVID-19 pandemic has led to a new category of consumer complaints such as swindlers peddling bogus cures and people disputing contracts over canceled events.

The Consumer Federation of America released its annual report of the most common consumer complaints with a look at pandemic-related problems, which tied as the 10th highest category.

But that’s likely not a true reflection of COVID-19-associated complaints, says Susan Grant, director of consumer protection and privacy at the Consumer Federation of America.

“The fastest growing and worst complaints of last year were of the pandemic,” Grant said. “It is probably higher. Not all agencies created a separate category of those complaints. Some complaints may be in areas of credit, entertainment, fraud, health clubs, tenants, retail services or utilities.

“The impact of the pandemic is clear in every section of the report, food-chain supply to social distancing, appliance repairs to child care. State and local consumer agencies experienced a deluge of complaints about price gouging and COVID-related scams.”

In times of disaster, nefarious people and shady businesses come out to make a quick buck.

The report says “crooks and opportunists took advantage of the pandemic to offer miracle cures, play on people’s loneliness to fraudulently advertise puppies for sale, and charge exorbitant prices for sought-after products such as toilet paper, masks, and hand-sanitizer.”

In California, a company was shut down after it marketed a paste made of radishes as a COVID-19 remedy.

Los Angeles mobilized a help center to connect landlords and tenants with emergency services during and after the eviction moratorium to keep people in their homes. The city expanded subpoena powers among municipal divisions to stop price gouging.

Contract disagreements spiked as high-dollar events like weddings and fundraisers were called off. That put things like prom dresses on layaway and caterers in conflict with customers wanting refunds.

Some child-care businesses were mandating that parents continue paying for services as a placeholder.

“One thing that was clear from the many complaints was that the usual terms of service and cancellation policies did not take into account the unusual circumstances in which consumers found themselves,” Grant said.

Participants in the survey included 34 consumer groups and the offices of 18 states’ attorneys general, Oklahoma not among them. But the issues described by an Arkansas official are likely similar to Oklahoma’s.

“Most complaints were about major purchases like cars, appliances, and home repairs and maintenance,” said Arkansas Deputy Attorney General Chuck Harder. “Underlying complaints are financing of those purchases.”

One situation involved a furniture store offering credit to customers, who later discovered that it was really a rent-to-own contract through a third party with terms that ramp up interest rates.

A college student purchased a $3,500 puppy with financing through an out-state bank that used an imported interest rate. The student agreed to $107 monthly payments for 104 months, for a total of over $11,000.

“The problem is the lending institution complied with mandatory disclosure and the paperwork complied with Arkansas law,” Harder said. “There was not anything we could do. We are unable to help consumers in those situations.”

Officials say consumer education has to be a priority: Read everything, and don’t be hasty in making decisions.

There has been an increase in hand-held devices used in stores to sign up customers for credit.

“Consumers have to scroll through a lot of pages to fully comprehend and understand the contract, often relying on what is being told to them, and sometimes that is not the real deal,” Grant said.

Be wary of places claiming “no credit needed” or “same as cash” financing schemes.

“We hope to head off those situations so consumers don’t find themselves in situations where they have no recourse but to live with the arrangement or default on those and have their stuff taken away,” Harder said.

Featured video:

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