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Paige Sutherland/MEDILL

Attorney General Lisa Madigan announced Illinois' top 10 consumer complaints Tuesday in honor of National Consumer Protection Week.

Consumer debt complaints to Madigan’s office rise by nearly a third

by Paige Sutherland
Mar 5, 2013

Paige Sutherland/MEDILL

Attorney General Lisa Madigan gives advice to students who are enrolling in college.

Top 10 consumer complaints of 2012

1. Consumer Debt
2. Identity Theft
3. Telecommunications
4. Construction/Home Improvement
5. Schools
6. Motor Vehicles/Used Auto Sales
7. Promotions and Schemes
8. Fraud Against Business
9. Mail Order
10. Motor Vehicle/Non-Warranty Repair

“Tip off to Rip off”

The warning signs of scams

1. Asking for advanced fees
2. Making promises that one will make thousands of dollars for doing nothing
3. An attempt at getting credibility, either email/letter from neighbor, CNN, Google, etc. that falsely recommends a sweepstakes, lottery, or work-at-home scam

According to Steve Bernas, president and CEO of the Chicago area Better Business Bureau.
Consumer debt was the top complaint received by Attorney General Lisa Madigan’s fraud division for the fifth year in a row.
Those complaints include mortgage lending, debt collections and credit card debt.

Out of the 26,316 complaints made this year to Madigan’s Consumer Protection Division, nearly a third were consumer debt complaints. Since the previous year, consumer debt complaints have grown by more than 29 percent. This increase can be attributed to a rise in residential lending complaints, according to Madigan’s office.

Student loan debt appeared on the list for the first time, ranking fifth.

This category accounts for trade and for-profit universities of higher education. Nearly 95 percent of these complaints involved unfair and misleading practices by for-profit colleges.

“The fact that fraud is taking place in institutions of higher education is a very sad statement of what is going on in the world,” Madigan said.

Most of the complaints come from a 2012 lawsuit against Westwood College, said Madigan who filed the lawsuit last January. More than 1,000 students filed complaints against Westwood College, a national for-profit school that has four campuses in Illinois.

Students attending Westwood College for criminal justice were paying $70,000 for an unaccredited degree, leaving them unqualified for a position in that particular field. It would cost students a tenth of the cost to receive a credited degree in criminal justice at one of Illinois’s community colleges, Madigan said.

Madigan also helped settle a national lawsuit with the company behind, Quinstreet, which was taking advantage of veterans by steering them to for-profit school clients. Quinstreet had to pay $2.5 million in penalties and transfer its website domain name to the Veterans Affairs Department.

The Illinois Attorney General’s office recently released a guide to help students enrolling in college, which can be found on their website.

About 50 percent of all scam complaints involved transferring money through Western Union or Money Gram, according to Steven Baker, Midwest director for the Federal Trade Commission. An estimated $400 million has been lost each year through these money transfers. Once money is picked up at these places it cannot be traced and crooks know that, Baker said.

The Federal Trade Commission is working with Western Union and Money Gram to try to prevent fraudulent behavior such as sweepstakes schemes, secret shopper schemes, or work-at-home scams.

According to a recent study by the Federal Trade Commission, 12 percent of the U.S. is ripped off by these frauds every year. Illinois as well as the city of Chicago is not ranked within the top 10 most victimized by fraud in the country.

A majority of these scams tend to prey on our emotions, said Tom Brady, inspector in charge of the U.S. Postal Inspection Service’s Chicago Division.

“We all like to be a winner, we all love to win $250 million dollars but the reality is it doesn’t happen and people have to understand that,” Brady said.

Madigan pleaded with consumers not to be fooled by these scams.

“Don’t send money to strangers, whether it is a work-at-home scam or a lottery scam, don’t do it. People who are asking you for money up front you don’t know are scam artists, it is absolutely that simple.”