Identity theft leads consumer complaints

Identify theft and other money-related complaints flooded the Illinois attorney general's office last year, which continued an upward trend of consumers seeking help in an economic downturn, Illinois Attorney General Lisa Madigan said Thursday.

The agency received 32,577 consumer complaints in 2007, including 6,388 on identity theft matters, up 20 percent. The office received 5,237 complaints on identify theft in 2006.

"We attributed a lot of these complaints to the economic climate," Madigan said during an interview.

Money-related cases -- complaints involving credit cards, financial institutions, mortgage companies and identify theft -- have peaked in the last couple of years, she said.

"When you look at the economy, this isn't a surprise," Madigan said. "We're seeing a higher volume of complaints that relate to people's pocketbooks and good name."

Consumers have become more aware, but still need education when dealing with complex issues, such as signing a mortgage or other credit-related contract, she said.

More complaints coming into the office also are attributed to the Identify Theft Hotline she started about two years ago. It has a dedicated staff of advocates and attorneys providing direct assistance to victims. The toll-free number is (866) 999-5630.

The majority of calls involve victims seeking to restore their reputations and their records. Others are seeking information and prevention.

Another top category involved collection agencies and credit cards. While unauthorized use of cards have been involved in identify theft cases, these other complaints focused on unauthorized membership club charges appearing on credit card accounts, balance transfer and introductory rate problems, higher interest rates than expected, and unexpected fees.

Other areas of problems also involved promotions and schemes, home improvement, phone companies, autos, mail order companies and utilities.

These problems aren't new and have been acerbated by easy access through the Internet, said Joel Whalen, associate professor of marketing at DePaul University.

"These are all classic areas of problems driven by disillusionment and dissatisfaction by consumers," said Whalen. "They have false expectations or don't think in business terms. And they don't always realize what the outcome would be."

Consumer groups need to continue their educational efforts to help boost consumer confidence, he said.

"In many cases, credit cards are tapped out and people are under a lot of pressure," Whalen said. "And the pressure on companies has been increasing. They need help."