ATTORNEY GENERAL MADIGAN: POCKETBOOK ISSUES CONTINUE TO TOP CONSUMER CONCERNS IN 2010
Madigan Files Lawsuit Aimed at New Wave of Consumer Debt Settlement Scams
Chicago Ė Attorney General Lisa Madigan today released her list of top 10 consumer complaints, detailing concerns of the 170,000 consumers who contacted her officeís Consumer Protection Division in 2010. In anticipation of National Consumer Protection Week, Madigan said that the top complaints involved consumer debt as the job loss and home foreclosures continue to take a toll on Illinois consumers.
That consumer debt again topped the list of concerns in 2010 mirrors what Madiganís office has seen in recent years as consumers struggle with pocketbook issues in a down economy. Complaints related to residential mortgages ranked highest among consumer debt concerns, showing that, much like 2009, people are still fighting to stay in their homes. Many consumers also contacted Madiganís office over credit card debt and abusive collection practices.
ďThe economic crisis continues to affect consumers in Illinois,Ē Attorney General Madigan said. ďPeople 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.Ē
Included in the more than 7,000 consumer debt complaints filed with Madiganís office is a new attempt to evade recent reforms aimed at protecting consumers. Last year, Madigan successfully led an effort to pass the Debt Settlement Consumer Protection Act, which bans upfront fees debt settlement companies charge and requires they can only collect fees if a consumerís debt is actually settled.
Attorney General Madigan today filed a lawsuit against a national legal firm that has unlawfully charged upfront fees to consumers in Bureau, Champaign, Kendall, Will and Cook counties. Madiganís suit, filed in Sangamon County Circuit Court, alleges Legal Helpers Debt Resolution LLC unlawfully charged consumers upfront fees for debt settlement services with promises to make them debt free. But, in fact, they never lowered the consumersí debt and actually left them worse off financially.
The lawsuit alleges Legal Helpers Debt Resolution, based in Chicago, illegally charged fees upfront under a guise that attorneys, who are exempted from an upfront fee ban, were providing the debt settlement service to consumers, enabling them to charge the initial fees. In fact, Madigan alleges, attorneys with Legal Helpers Debt Resolution only served as a front to the business, and debt settlement service was contracted out to non-lawyer, third-party companies.
Attorney General Madigan also today detailed the 27,630 formal complaints lodged with her office in 2010 by consumers affected by scams and fraud:
Consumer Debt Complaints Rank First in 2010
In 2010, Madiganís Consumer Fraud Bureau helped secure an estimated $25 million in mortgage-related savings, including loan modifications for borrowers. In the wake of the foreclosure crisis, Madigan established the Homeowner Helpline (1-866-544-7151) to provide direct assistance for borrowers at risk of foreclosure. Since the hotline launched in October 2008, more than 32,000 have called the Attorney Generalís office for help. Madigan encourages consumers struggling to stay current with mortgage payments to contact the helpline to learn more about their rights and the options available to them to try to save their homes.
Credit Card Companies
Identity Theft Complaints Rank Second
Most of the consumers who filed these complaints to Madiganís office in 2010 did so by contacting her Identity Theft Hotline (1-866-999-5630). The hotline has received more than 29,000 calls since it launched in February 2006. Trained advocates and attorneys answer calls to the hotline, working with consumers to help them by reporting the crime to local law enforcement and financial institutions, repairing their credit and protecting their identity.
The Top 10 consumer complaints for 2010:
For more information, visit Madiganís website, www.illinoisattorneygeneral.gov/consumers. Attorney General Madigan has also established a range of hotlines in her office for direct communication with consumers concerned about issues ranging from home foreclosure to identity theft:
Chicago Consumer Fraud Hotline: 1-800-386-5438
Springfield Consumer Fraud Hotline: 1-800-243-0618
Carbondale Consumer Fraud Hotline: 1-800-243-0607
Spanish Language Hotline: 1-866-310-8398
Identity Theft Hotline: 1-866-999-5630
Homeowner Helpline: 1-866-544-7151