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Anxiety-ridden consumers filing more BBB complaints

Pat Patera

Complaints filed with the Better Business Bureau shot up 14 percent in the Reno Tahoe region last year, and one reason is economic anxiety, says Tim Johnston, president and chief executive officer at Better Business Bureau of Northern Nevada.

The rising numbers, he says, are indicative of what consumers are facing. “Agitation levels are on the increase. People are at a loss for what to do because they’re caught in circumstances they had not expected to find themselves in.”

Last year, consumers filed 4,027 complaints against businesses in the region.

And one type of company – those that issue bridge loans to tide consumers over until payday – saw a 46 percent increase over the previous year. Complaints rose from 202 in 2007 to 378 in 2008. Consumers checking out payday lenders generated the largest number of inquiries: 6,027, a 50 percent increase over 2007.

Usually, says Johnston, people are unhappy with loan fees.

“They often say they weren’t told up front, or are unhappy with fees tacked on later,” he says. “However, some misuse the payday loan office: they take out a first loan and can’t repay it; so take another loan to pay off that one. It snowballs.”

However, that situation turns ugly when the payday loan service, which has access to the customer’s bank account, simply sucks out the money due. Now that customer may find himself unable to pay the mortgage, says Johnston.

Although complaints focus on certain businesses such as loan providers, secured credit cards, collection agencies and auto sales and repair all companies feel the impact of increased complaints, says Johnston.

“If consumers don’t trust business, they won’t do business.”

The broader goal of the Better Business Bureau, he adds, is to create a marketplace where business and consumers can trust each other.

Despite last year’s deluge of complaints – a doubling in workload the Reno bureau operates with a staff of five, just as it did before. Technology helps the staff handle the increase, says Johnston. When he took the helm, he switched to an automated system that manages the heavy contact flow of correspondence – tracking letters, faxes, and emails.

Complaint resolution reached 73 percent across all industries last year. But satisfaction of payday loan complaints were down: about 35 percent in 2008, down from 40 percent in 2007.

Other factors may contribute to the increased number of complaints, says Johnston. For one, BBB has begun a marketing campaign to raise its visibility with the younger generation, which tends not to know about the Better Business Bureau. And its online form makes it easier to complain.

Meanwhile, the bureau is working to get its reports to display more prominently in web search results when people look for information on a particular company or category, such as auto repair, Reno. “We want our report to display as well,” says Johnston.

This year, he expects to see complaints increase again. One reason: When the economy does poorly, scammers do well. “The scams are the same, but the scammers are better at their trade. And now, people are more susceptible to those schemes.”

People are seeking solutions to their economic woes. Sometimes, says Johnston, “When they call the bureau, they want staff to make decisions for them. They”ll say, ‘I’m falling behind on my mortgage. What should I do?'”

Anxiety will remain a driving force to keep those complaints coming.

“In an economy like this, people are watching their money,” says Johnston. “They’ll complain about things that before they might have brushed off as a lesson well learned.”