Online Staff Report
Attorney General Lisa Madigan (D) released her annual Top 10 List of Consumer Complaints, Tuesday, Feb. 11, revealing Illinois residents are increasingly worried over how businesses protect their personal and financial information in the wake of widespread data breaches reported last year. In 2013, Madigan’s office saw a 1,600 percent increase in data breach complaints compared to the year before.
Madigan’s office received more than 20,500 complaints in 2013. Identity theft complaints recorded the largest increase – from 2,544 complaints in 2012 to 3,009 complaints for 2013. Within this category of complaints, Madigan’s office reported a significant increase in complaints specifically about data breaches — from 33 complaints in 2012 to 576 filed in 2013, representing a 1,600 percent increase.
Madigan attributed the spike in complaints to the major data breaches reported last year by Target and Advocate Health Care, which left consumers scrambling to protect their personal information and, for Target customers, to address fraudulent charges on their bank or credit card accounts. Madigan is currently investigating those breaches and two others reported this year by Neiman Marcus and Michaels Stores.
Last week, Madigan testified before the U.S. House of Representatives’ Subcommittee on Commerce, Manufacturing and Trade about her ongoing investigations and the urgent need for Congress to address the epidemic of data breaches being reported by companies nationwide.
“Identity theft is perhaps the most damaging financial scam that affects people today,” said Madigan. “Last year alone, $21 billion was lost to identity theft. The harm being done to consumers is too great to allow these breaches to continue without a concerted effort by both the government and the private sector to stop them from happening.”
Identity theft has been a persistent problem for Illinois consumers as technology has opened consumers up to more risk when they shop online and use their debit and credit cards at stores. In the last seven years, identity theft complaints have ranked among the top two complaints filed with Madigan’s office.
In response, Madigan’s office worked to enact a 2005 state law that requires companies to promptly notify their customers of data breaches to ensure consumers know when their sensitive data has been compromised.
The following year, Madigan launched her office’s Identity Theft Unit and Hotline (1-866-999-5630), which is staffed by a team of experts who provide one-on-one assistance to help consumers report the crime to law enforcement and financial institutions, repair their credit, and prevent future problems. Since the creation of the hotline, the Attorney General’s office has received more than 40,000 requests for assistance from victims of identity theft and assisted in removing $26 million in unauthorized charges from consumers’ accounts.
Top 10 Breakdown
Madigan’s annual top 10 list of consumer complaints ranks every complaint her office receives on a range of topics, including complaints about mortgage lending, debt collection, credit cards and common consumer scams. The rise in data breach complaints contributed to identity theft complaints ranking second on the list, for a total of 3,009 complaints. Of those complaints, consumers reported incidents of fraudulent charges on their existing accounts, thieves opening new accounts in their names and instances of bank fraud, such as stolen checks or fraudulent withdrawals made to a victim’s bank account.
In total, Madigan’s Consumer Fraud Bureau achieved about $1.18 billion in savings and restitution for Illinois consumers in 2013. In addition to identity theft complaints, Madigan noted other categories that topped her list of complaints involved consumer debt, telecommunications and home repair:
1. Consumer Debt (mortgage lending, debt collections, credit cards)—4,340
2. Identity Theft (fraudulent credit cards and utility accounts, bank fraud)—3,009
3. Telecommunications (wireless service, local phone service, cable/satellite)—1,870
4. Construction/Home Improvement (remodeling, roofs/gutters)—1,688
5. Motor Vehicles/Used Auto Sales (as-is sales, financing, warranties)—1,167
6. Promotions & Schemes (sweepstakes, pyramid, work-at home scams)—879
7. Mail Order (Internet purchases, catalog ordering, television/radio)—833
8. Fraud Against Business (consulting, directories/publications)—777
9. Motor Vehicle/Non-Warranty Repair (collision/body, engines)—526
10. Travel (time shares, promotions/sales, travel agents)—439