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Mortgages, ID theft common consumer complaints, attorney general says

SPRINGFIELD -- Problems with mortgages and identity theft top a consumer complaints list Wednesday released by Illinois Attorney General Lisa Madigan.

Madigan's office received 7,035 complaints dealing with consumer debt in 2010, which is down from the 7,843 complaints in 2009. The consumer debt category includes mortgage foreclosure, collection agencies and credit card companies.

Madigan said most mortgage complaints aren't due to borrowers getting loans they can't afford to pay. Instead, it's people who have run into financial trouble and have turned to companies that claim to be able to modify their mortgages.

"Often times, the complaints we receive are what I refer to as mortgage rescue scams," Madigan said during a telephone interview. "These are people who contact you by phone, or, maybe you've seen their advertisement. They say they can get you a modification on your mortgage, but you have to pay them a fee."

Madigan said up-front fees for mortgage modifications have been illegal in Illinois since she pushed for the legislation in 2006.

"We've probably brought close to 35 cases against these mortgage rescue fraud scammers. We have sent cease-and-desist letters out to hundreds," Madigan said.

More than 3,800 homeowners filed residential mortgage complaints with Madigan's office in 2010. That's similar to what the office saw in 2009.

About 1,200 people reported problems with collection agencies. Some of the complaints alleged that the agencies tried to collect money without verifying a consumer actually owed the debt.

More than 700 consumers sought help with credit card company issues, including trouble with balance transfers and introductory rate offers.

"The red flag for people, whether it involves a mortgage modification or settling a debt with your credit card company, is if someone tells you to pay an upfront fee. In both of those instances, here in Illinois, we have prohibited that. It's illegal," Madigan said.

Identity theft still a problem

Complaints involving identity theft ranked second on Madigan's list. Those included reports of fraudulent charges to existing accounts and thieves opening new credit card accounts in the names of others.

Overall, the number the number of identity theft complaints filed with Madigan's office fell from 4,376 in 2009 to 3,681 in 2010.

Madigan speculated that the numbers are declining because people are aware of the problem.

"People are becoming more savvy. We have been talking about identity theft for at least five or six years. It's really been front and center," Madigan said.

Victims of identity theft are encouraged to call the attorney general's office.

Madigan said her office has packets that can help people begin the process of restoring their credit. The kits even include sample letters that people can use.

"We have real live people who answer our phones. They will answer your questions," Madigan said.

Local cases easier to solve

While identity theft cases can involve people who live out of state or in another country, in some instances, the victim and the person who stole their identity may know each other.

Chatham Police Chief John Holm said that in some instances, they have taken an identity theft report and then gotten video from a store where a fraudulent credit card was used. When they show the video to the victim, they often recognizes the person in the video.

"Those are pretty easy to solve," Holm said.

Springfield Deputy Police Chief Cliff Buscher said city officers see the same type of cases.

"We'll get stuff from Bloomington or Peoria where they will be working a case where a card is used in our jurisdiction. We'll try and track that down for them and help them out. They'll do the same for us," Buscher said.

Last year, Springfield police handled 103 identity theft complaints, only one more than in 2009.

"That's not bad for a whole year of reports," Buscher said.

Cases that involve people in other states or countries are tougher for the local departments.

"Obviously, we can't send an officer to South Africa or wherever it may be to follow up on an investigation," Holm said. "It's difficult and frustrating for the people involved."

In such instances, Chatham police refer victims to agencies like the attorney general's office.

Springfield police often run into the same problem.

"If it's something overseas, there's not a whole lot we can do," Buscher said. "If it's something local, something we think we can get a handle on, we'll definitely assign someone to follow-up."

John Reynolds can be reached at (217) 788-1524.

Need Help?

The Illinois Attorney General's Office has multiple hotlines for people who need help on consumer issues. Additional information is also available at www.illinoisattorneygeneral.gov.

Springfield Consumer Fraud Hotline: 1-800-243-0618

Chicago Consumer Fraud Hotline: 1-800-386-5438

Identity Theft Hotline: 1-866-999-5630

Homeowner Helpline: 1-866-544-7151

Spanish Language Hotline: 1-866-310-8398

Top 10 consumer complaints for 2010

1. Consumer debt (mortgage lending, collections, credit cards) 7,035 complaints

2. Identity theft (fraudulent credit cards and utility accounts, bank fraud) 3,681 complaints

3. Construction home improvement (remodeling, roofs/gutters) 2,175 complaints.

4. Telecommunications (wireless service, local phone service, cable/satellite) 1,917 complaints

5. Motor vehicle/used auto sales (as-is sales, financing, warranties) 1,345 complaints

6. Promotions and schemes (sweepstakes, pyramid, work-at-home schemes) 1,137 complaints

7. Mail order (internet purchases, catalog ordering, television/radio) 1,043 complaints

8. Fraud against business (consulting, directories/publications) 982 complaints

9. Motor vehicle/non-warranty repair (collision, engines) 688 complaints

10. Travel (promotions/sales, time shares, travel agents) 629 complaints

Gas prices topped complaint list in 2005

Six years ago, in the wake of Hurricane Katrina, gas prices topped Attorney General Lisa Madigan's Top Ten Complaints list.

Madigan's office received 3,327 gasoline complaints in 2005. Before 2005, gas prices had never led the Top Ten List.

Other 2005 complaints were: credit, 3,275 complaints; construction, home improvement, 3025 complaints; telecommunications, 2,602 complaints; promotions and schemes, 1,767 complaints; motor vehicles, used auto sales, 1,448 complaints; mail order sales, 1,237 complaints; financial services, 847 complaints; motor vehicle, non-warranty, 728 complaints; utilities, 707 complaints.