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Big profit promises from business 'coaches' top consumer complaint

By Jasen Lee | Posted - Mar 6th, 2013 @ 10:01am



SALT LAKE CITY — Utah consumers have spoken, and their biggest complaint in 2012 was with coaching services.

The Utah Division of Consumer Protection released its annual "Top 10 Consumer Complaints" in conjunction with National Consumer Protection Week. In the report, it cited the coaching services category as raking in 26 percent of the total complaints received by the division last year.

"Coaching services offering big profit promises remain an attractive pitch for consumers who end up losing thousands of dollars while chasing an offer that never delivers," said division director Traci Gundersen.

With the release of each annual report, the division hopes to educate Utah consumers on the risks and schemes from year to year. Francine Giani, executive director of the Utah Department of Commerce, said all Utahns can fall victim to the scams and deception.

The division also highlighted the Federal Trade Commission's 2012 "Consumer Sentinel" report, which tracked Utah consumer complaints to the federal agency.

According to the 2012 Federal Trade Commission state-by-state "Consumer Sentinel" report, Utah consumers reported 9,907 complaints to the federal agency between Jan. 1 and Dec. 31, 2012

Utah complaints to FTC
Rank Top categories Complaints Percentage
1 Debt collection 1,293 13%
2 Shop-at-home, catalog sales 768 8%
3 Banks and lenders 675 7%
4 Telephone and mobile services 629 6%
5 Internet services 556 6%
6 Imposter scams 548 6%
7 Auto-related complaints 533 5%
8 Money offers, counterfeit check scams 372 4%
9 Prizes, sweepstakes, lotteries 358 4%
10 Credit cards 310 3%

"Consumers of all ages remain the prime target for fraudsters who seek new ways to profit by deception," she said. "Our division hopes that by sharing this list, Utahns will be aware of the scams circling our state and be able to protect their families against fraud."

Here are the top 10 complaints:

Coaching services: These services are offered to purchasers of business opportunities that tend to cost many thousands of dollars more than the original business opportunity. Some of the deceptive practices common to this type of complaint are misrepresentation of potential earnings and the qualifications or experience of the coaches.

Deposits/refunds: The deceptive practices that are common to this category include the failure to make refunds when required and the failure to disclose refund policies.

Retail sales: Common deceptive practices include the failure to deliver products during the time frame represented, providing a product or service that is only similar to the product or service purchased, but does not have the same qualities; the failure to honor warranties; and the failure to make refunds when required or disclose refund policies.

E-commerce/Internet offers: Among the most pervasive scams reported, con artists are able to use the Internet to exploit a consumer's vulnerability. Some of the more common tactics used are the unauthorized debiting of a consumer's bank account, the automatic billing of a monthly fee until notice of cancellation is received and the failure to provide any applicable right of rescission.

Model/talent/acting offers: Consumers are led to believe that their child is special and would make a great actor and they are pressured into purchasing costly classes and enter into contracts where fees are paid to the agency before any work is secured for the client.

Telemarketing: Scams involve telephone marketers who make misrepresentations to entice consumers to sign up for a product or service.

More info...
For more information or to file a consumer complaint, contact the Utah Division of Consumer Protection at 801-530-6601 or log onto www.consumerprotection.utah.gov

Personal services: Complaints reflect scams involving lawn care, television subscriber services, etc.

Alarm systems: Alarm systems are often sold door-to-door with aggressive sales tactics. In many instances, the company sells a new service as if it were an upgrade to an existing service resulting in the consumer being obligated to pay on two separate contracts.

Auto repairs/sales: Complaints include failure to disclose refund policies, failure to obtain the consumer’s express authorization prior to making repairs and unnecessary repairs. Sales complaints include misrepresentations in advertising, aggressive sales practices and making contracts with an incapacitated or vulnerable purchaser.

Home improvement/repair: Deceptive practices include the failure of the contractor to provide the service after receiving the consumer’s deposit; the failure of the contractor to honor warranties; the misrepresentation of the work of another as being the work of the contractor; and the refusal by the contractor to continue working until the consumer agrees to a higher price.

“Consumers of all ages remain the prime target for fraudsters who seek new ways to profit by deception,” warned Francine Giani, executive director of the Utah Department of Commerce. “Our division hopes that by sharing this list, Utahns will be aware of the scams circling our state and be able to protect their families against fraud.”

Visit www.ncpw.gov for more information on National Consumer Protection Week

Contributing: Cait Orton

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