Consumer debt still No. 1 source of complaints

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Attorney General Lisa Madigan announced the Top 10 consumer complaints at the Thompson Center. She was joined by Todd Kossow of the Federal Trade Commission. | Rich Hein/Sun-Times

Phony debt-relief companies topped the list of scammers shopping too-good-to-be-true offers to Illinois residents in 2015, with schemes targeting student loan borrowers rising fast, Attorney General Lisa Madigan said Monday.

Marking the start of “Consumer Protection Week,” Madigan said that scams seem to track the economy, or rather, the losers in economic tumults.

When the economy collapsed in 2008, debt-related scams surpassed identity theft as the most common consumer complaint, Madigan said. With a weak job market, college graduates who were oversold by pricey for-profit colleges and stuck with college debt have become targets for scammers.

“Since 2008, consumer debt has been No. 1,” Madigan said. “Prior to 2008, it was identity theft.”

Out of the 25,000 consumer complaints the attorney general’s office received last year, 3,350 complaints were about overly aggressive collection agencies and scammers offering debt relief. Another 1,523 complaints were made against for-profit colleges and student loan hustles.

Madigan’s office also is investigating Navient Corp., the student loan servicing company formerly known as Sallie Mae, and last week filed a lawsuit against a Lombard company that claimed to help student loan relief assistance.

Madigan said Navient staff tend to steer students struggling to make payments into “deferments” of their payments, which allows students to put off making payments. But interest continues to pile up, and then is added into the principal of the loan once payments resume. Madigan said that means borrowers pay much more in the long run than if Navient made them aware of other options available for cash-strapped graduates.

The AG’s office last week filed a lawsuit against National Student Loan Rescue, a Lombard company that claims to help borrowers reduce their monthly payments, remove wage garnishments or even have loans forgiven. The lawsuit alleges the company charges steep fees and does little more than fill out paperwork to enroll in free programs that are available through the federal government. The suit is the eighth Madigan’s office has filed against an alleged student loan relief scam operator.

The Chicago Sun-Times was unable to reach National Student Loan Rescue officials Monday.

Madigan’s office also offers a “Student Loan Helpline”, (800) 455-2456, which offers assistance to student borrowers.

The Top 10 complaints reported to the AG’s office in 2015

  1. 3,350 Consumer Debt
  2. (mortgages, collection agencies, banks)
  3. 2,636 Identity Theft
  4. (government document fraud, credit cards, utilities, data breaches)
  5. 2,188 Telecommunications
  6. (telemarketing, cable and satellite TV, phone service and repairs, cell phones)
  7. 2,167 Construction/Home Improvement
  8. (remodeling, roofs and gutters, heating and cooling, plumbing)
  9. 1,835 Used Auto Sales/Motor Vehicles
  10. (as-is used cars, financing, warranties)
  11. 1,813 Promotions/Schemes
  12. (phone scams, investment schemes, lottery scams, phishing)
  13. 1,523 Education
  14. (for-profit schools, student loan debt, loan counseling)
  15. 1,019 Internet/Mail Order Products
  16. (Internet and catalog purchases, TV and radio advertising)
  17. 726 Fraud Against Business
  18. (consulting services, equipment leasing, directories and publications)
  19. 714 Motor Vehicle/Non-Warranty Repair
  20. (collision, engines, oil changes and tune-ups)
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