Car Insurance

The Internet is providing new opportunities for scams and so is an increase in car leasing, although those complaints don’t yet approach those of used-car sales, auto repairs and home improvement.

So said two consumer protection groups that asked state agencies about practices that produced the most complaints. They also learned that con artists are especially targeting the Latino community.

The National Association of Consumer Agency Administrators and the Consumer Federation of America asked consumer agencies to list the top five subjects that generated the most complaints in 1995. Nearly four out of five of the 46 respondents cited used-car sales as the most frequent complaint. Auto repair and home improvement complaints were not far behind. Telemarketing and new-car sales also were in the top complaint list. The increase in car leasing complaints comes at a time when nearly one in three new cars is being leased, rather than sold. “The most common complaint was that consumers did not understand the complicated contract,” said Stephen Brobeck, executive director of the Consumer Federation of America. “Some consumers thought they were purchasing, not (leasing), an automobile. Others were unaware of the substantial charges for early termination (of the contract) or excessive wear and tear.” The Federal Reserve Board last month decided to require that details about leases be put on a single sheet to improve consumer understanding of the deal and simplify the language. But Brobeck said it didn’t go far enough. “The rules, for example, do not require a prominent statement that the agreement is for leasing, not purchase,” he said. “Fortunately, several states do regulate this disclosure.” Among leasing complaints is the “disappearing trade-in” where the consumer is verbally promised a trade-in amount, which does not show up in the actual contract.