Consumer Group Criticizes Federal Pre-Emption

Federal authorities should give state and local officials more leeway in enforcing consumer protection laws, the Consumer Federation of America said yesterday.

The organization released a study, done in conjunction with the National Association of Consumer Agency Administrators, of consumer complaints and enforcement. The survey of consumer protection agencies found a trend of federal officials pre-empting state and local authorities on the front lines of consumer protection, the federation said.

Agencies surveyed complained that federal laws governing Internet privacy and the financial and airline industries were weak, the federation said. The agencies also took aim at federal laws governing problematic industries such as rent-to-own marketing, payday lending and interstate moving.

“Agencies that are closest to consumers are being denied the authority to enforce stronger state laws or to bring cases against entire industries, such as interstate moving or airlines,” Jean Ann Fox, the federation's director of consumer protection, said in a statement. “States should be able to enact stronger protections and to close loopholes exploited by industries, such as rent-to-own and payday lending, that attempt to evade state protections.”

The survey also revealed that consumer protection agency budgets are not keeping up with their growing caseloads. Agencies handled 23 percent more consumer complaints on average from the year before, while their budgets rose 7 percent on average, according to the study.

Agencies handled about 325,000 consumer complaints, 70 percent of which were successfully resolved, and recouped nearly $110 million for consumers in 2001, the study found.

Home improvement contractors topped the list of consumer complaints in 2001. Home improvement contracting has been in the top five complaints of the survey — now in its 11th year — for four of the past five years.

“It's obviously a perennial issue,” said Nancy Sabella, executive director of the National Association of Consumer Agency Administrators. “With the economy and the housing markets being the way they are, consumers are opting to stay in the home they own and make improvements.”

Some states regulate home improvement contractors more thoroughly than others, Sabella said. The ease with which contractors can abandon one business and start another under a new business name makes tracking down unscrupulous members of the industry more difficult.

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