Barbara Shelly

Barbara Shelly: A short list of outrageous consumer ripoffs, and most are legal

Missouri Attorney General Chris Koster proposes some court reforms to curb the predatory practices of zombie debt collectors.
Missouri Attorney General Chris Koster proposes some court reforms to curb the predatory practices of zombie debt collectors.

National Consumer Protection Week is drawing to a close.

What, you missed it? Not surprising. Consumers represent a large universe — everybody, in fact — but they are easily overshadowed by special interests.

I would have eluded all mention of Consumer Protection Week myself had I not noticed a press release from Missouri Attorney General Chris Koster.

Koster used the occasion to list the most frequent gripes that are relayed to his office.

They are about what you’d expect. Unwanted telemarketing calls easily topped the list. Solicitation scams were a not-very-close second. They were followed by complaints about debt collectors and online lenders, automotive and car title ripoffs, identity theft, phone billing, home repairs, retail purchases, travel and timeshare schemes, health clubs and medical billing.

In keeping with the moment, I am compiling a short list of ripoffs that bother me the most. Unlike a pesky telemarketing call, these can seriously mess up somebody’s life.

▪ Zombie debt collectors. These greedy operators purchase debt for as little as 3 cents on the dollar from credit card companies and other places. Then they set about hunting down the borrowers and suing them for principal and interest.

They are reckless operators, filing lawsuits without proper documentation and often fraudulently. Sometimes they sue the wrong person. Sometimes the debt has already been discharged in bankruptcy.

But because defendants are usually poor and disproportionately minority, most can’t afford a lawyer. So Zombie debt vultures collect thousands of judgments a year in Jackson County alone. Defendants are then often socked with attorneys’ fees and court costs. How much worse can it get?

▪ Payday loans. Your friendly “quick cash” shop is not, as advertised, a place to help out a neighbor in a pinch. Its financial success depends on getting customers to come back for repeated loans at high interest, regardless of whether they’ve paid off the earlier ones. Online lenders are the worst; they are out to rob consumers of what little they have. Car title lenders are right up there, too.

▪ For-profit colleges. This industry is full of bad actors. They put a hard sell on low-income people, promising bright futures but delivering inadequate educations, credits that can’t be transferred to legitimate schools, dismal job prospects and mountains of student debt.

I’ve talked to for-profit college graduates who have racked up debt exceeding $50,000 while training for $10-an-hour jobs, like medical assistant. And often they are deemed unqualified for those. Please, people, look at your community colleges. They are less costly and much more honest.

▪ Notarios and the like. Newly arrived immigrants and refugees are easy prey for con artists. “Notarios” claim to be immigration experts, but their expertise is in deception. Besides making promises they can’t fulfill, they’ll go so far as to charge clients for government forms that are available for free. Refugees run into the same kinds of problems with cheats who offer to help with paperwork or with tax returns.

The most victimized consumers don’t often take their cases to the attorney general’s office. Refugees and immigrants may not know it exists, or they may not want to draw attention to themselves. Impoverished people who get scammed may think no one is going to listen.

Then there’s the problem that some of the worst consumer abuses occur in legal industries that spend big bucks to avoid significant reforms. For-profit colleges are especially skilled at lobbying their way out of regulations, and many a local and national politician has enjoyed a nice campaign payday from the payday loan industry.

On National Consumer Protection Week, we should look at who exactly is being protected. Often it’s not the consumer.