Survey Notes Rise in 2 Fraud Categories

WASHINGTON — Questionable auto-leasing arrangements and deceptive practices aimed at Latinos have emerged as major new sources of consumer fraud complaints, according to a survey released Tuesday by consumer advocate agencies.

Although those two categories have not displaced the big three complaint generators--used-car sales and repair, home improvement and construction, and telephone solicitation--they do represent the fastest-growing problem areas, enforcement officials said.

“The Spanish-speaking component of our society has become easy prey solely because of a language difference,” said Joseph K. Goldberg, president of the National Assn. of Consumer Agency Administrations, which conducted the survey with the Consumer Federation of America.

Stephen Brobeck, the federation’s executive director, added that the number of auto-leasing complaints doubled in the last year at the 17 local agencies that kept records.

The survey, the fifth annual one by the two groups, asked 46 state and local agencies to list the five subjects that generated the greatest numbers of complaints. The result: used-car sales (in the top five of 79% of the agencies); auto repair (74%); home improvement and construction (71%); new-car sales (58%); and marketing, including telemarketing and mail solicitation (45%).

Consumer fraud and deception are conservatively estimated to cost consumers billions of dollars annually, according to the Consumer Federation.

Brobeck said that the No. 1 complaint associated with auto leasing is that “consumers did not understand the complicated contract. Some consumers thought that they were purchasing, not leasing, an automobile. Others were unaware of substantial charges for early termination or excessive wear and tear.”

Almost one-third of all new cars are now leased rather than purchased.

Revised federal regulations on auto leasing are scheduled to go into effect next October, but Brobeck said they do not go far enough. The Consumer Federation wants a “prominent statement” to let customers know that they are signing a lease agreement and not buying the car; a 24-hour period during which the agreement can be revoked; and a dollar amount specified for early termination of the lease.

As for the problem of consumer fraud directed at Spanish-speaking populations, Goldberg said that consumer agencies must make an extra effort to reach Latinos.

“We must ensure that consumer protection materials are provided in the primary language and expand our outreach to those groups to make sure they know that consumer protection is available to them,” he said.

Robin Gysin, consumer affairs coordinator for the district attorney’s office in Santa Cruz, whose data is included in the survey, said that many car dealerships “failed to issue the leasing contract in Spanish as required by California law when dealing with Spanish-speaking persons.”

California law requires written contracts to be translated into the language in which the deal was verbally negotiated.

As the problem has attracted attention nationwide, more dealerships are providing Spanish-language documents. But, Gysin said, “either because of uninformed individuals or aggressive salesmen, we still are seeing individuals unaware that they have leased a car instead of purchasing it.”

Gysin said that Spanish-speaking persons are complaining more about health clubs and used-car contracts.

“We have problems with young teenage Hispanic girls who are buying health club memberships and not realizing they are signing two- or three-year contracts.”

The San Francisco district attorney’s office said that Spanish-speaking immigrants have lost thousands of dollars to a woman posing as an Immigration and Naturalization Service employee claiming to expedite their citizenship applications for a fee.

Goldberg predicted that consumer agencies will see a rise in complaints related to the Internet, the newly deregulated public utility field and home improvement.

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Consumer Smarts

Stephen Brobeck of the Consumer Federations of America and Joseph K. Goldberg of the National Assn. of Consumer Agency Administrations offered this advice when purchasing merchandise or services:

* Don’t buy from telemarketers unless you’ve checked them out. In general, make purchases by telephone only when you initiate the call.

* Be cautious when asked to pay in advance for goods and services.

* Don’t rely on verbal agreements. Always read the contract.

Researched by D’JAMILA SALEM-FITZGERALD and KATHY M. KRISTOF