- Victim Assistance
- Consumer Protection
- Media Center
- Topical Index
MADISON - In recognition of National Consumer Protection Week, Wisconsin Attorney General J.B. Van Hollen joins with Rod Nilsestuen, the Secretary of Department of Agriculture Trade and Consumer Protection (DATCP) and Lorrie Keating Heinemann, the Secretary of Department of Financial Institutions (DFI) in educating Wisconsin consumers about some of the more pervasive scams targeted at consumers' pocket books during these tough economic times. Because we believe that knowledge is the best tool for protecting consumers, we have highlighted some common unfair practices that can put consumers at risk, and identified tools to help protect consumers against those practices. "Protecting Wisconsin consumers is one of the important responsibilities of the Wisconsin Department of Justice in partnership with DATCP and DFI," said Attorney General Van Hollen. "Our partnership and the important cooperation with DATCP and DFI protects Wisconsin's citizens."
Probably the most significant consumer protection issue of this economic downturn is mortgage related fraud. In particular, DOJ, DATCP and DFI have seen the emergence and rise of loan modification fraud and foreclosure rescue fraud against distressed homeowners. The Department of Justice has filed actions against loan modification companies that illegally charge up-front fees for services and DFI, DATCP and DOJ remain committed to investigating and prosecuting entities and individuals who promise to help vulnerable homeowners stay in their homes but in reality provide little or no services.
In addition, the Wisconsin Department of Justice entered into a settlement negotiation with one of the nation's largest mortgage lenders, Countrywide Financial Corporation in 2009, which resulted in $1.6 million dollars of relief for the State of Wisconsin. Attorney General Van Hollen granted a portion of the settlement proceeds to fund the Milwaukee Foreclosure Mediation Program, run by Marquette University Law School.
But here again, the best protection for consumers threatened by mortgage-related fraud is to know their rights. We encourage consumers to the visit the websites of the Department of Justice, DATCP, and DFI where they can find scores of useful information about the rights of homeowners, and how to avoid mortgage foreclosure scams.
Predatory lending takes place when lenders take unfair advantage of a consumer's financial needs by charging hidden fees and failing to disclose all the required material terms about the loan. These practices can lead to a cycle of debt that becomes extremely difficult for consumers to unwind, and often can ruin a consumer's credit. The Wisconsin Department of Justice, DATCP and DFI continue to prosecute lending institutions that are not in compliance with Wisconsin's lending laws -- filing suit on behalf of both DATCP and DFI against a predatory computer financing company BlueHippo Funding, and bringing two class action lawsuits on behalf of DFI against internet payday lenders Arrowhead and Tremont.
Consumers can also protect themselves by knowing their rights as borrowers. At DFI's website, consumers can access the publication, Understanding Credit, which is a fantastic resource for people who have no experience with credit or for those who have many credit accounts. In addition, DFI provides information on how payday loans work and important information a consumer should know prior to taking out a payday loan. "Education is important because well-informed consumers will make better financial decisions," states Department of Financial Institutions Secretary Heinemann.
Rebates have gone up tenfold in recent years. And with the increase in rebates comes the increase in rebate scams. The most common of rebates scams are those that make the rebate requirements so complicated, that it is virtually impossible to obtain it. Attorney General Van Hollen, with the aid of DATCP, successfully prosecuted one such rebate scam last year against the companies, Kool View Co., Inc., and The National Rebate Fund, Inc.
Because these rebate scams are all too common, DATCP has outlined for consumers how they can protect themselves by following a few guidelines prior to making any rebate purchase.
"DATCP offers many resources, both online and through our hotline, 1-800-422-7128, to help people avoid scams and other abuses of the marketplace," said Secretary Nilsestuen. "At the same time, the agency has worked hard with the Department of Justice and other prosecutors to go after bad actors. These cooperative efforts ranged from a $12 million recovery in a case of lead paint in children's toys to criminal charges in a case of a home remodeler who failed to complete a $55,000 remodeling job."
Get these and other facts about protecting your privacy, managing your money and debt, avoiding identity theft, understanding credit and mortgages, and steering clear of frauds and scams at both DATCP and DFI's websites.