Complaints by industry in the U.S.
The outbreak of the novel coronavirus in 2020 created new problems in nearly every market. From fake cures to price gouging, worker shortages, and dubious “disinfecting” services, consumers around the world have found themselves surrounded by unfamiliar and deceptive business practices. They have responded in kind with a rush of complaints — one of the main forms of recourse available to citizens who feel they have been mistreated by a professional or a business entity.
What is a complaint?
When a member of the public has a grievance with a merchant or service provider, one of the ways they can express this grievance is by filing a complaint with the offending party’s regulator (or with an industry self-regulator like the Better Business Bureau). Consumers file complaints all the time. The Consumer Financial Protection Bureau, for example, handled 542,300 complaints in 2020 alone, a 54% surge from the previous year.
Complaints help regulators serve the public by providing insight into the frustrations and obstacles that consumers face in each industry. Making complaints accessible to the public and easy to file can be seen as an act of transparent regulation, while any disciplinary action taken in response to a complaint (like a fine or license revocation) can be seen as an act of reactive regulation.
Different regulators respond to complaints in different ways. Professional regulators who focus more exclusively on licensing may conduct partial investigations on complaints in-house before handing them over to the state for potential prosecution. Others act as their own judge and jury, assessing complaints, conducting investigations, and levying penalties without any outside help.
The extent to which complaints can help regulators measure their own success is limited. Sometimes a regulator can take a step toward transparency by streamlining its complaint process, only to be met with a rush of grievances that reveal glaring new flaws in the industry. Even if complaints are thoroughly investigated and corrective action is taken, it’s difficult to tell from complaints alone how effectively a regulator is doing its job.
For our purposes, we will focus here on complaints filed by industry in the United States, keeping in mind for future posts that regulators’ responses to these complaints can come in many different forms and carry far-reaching implications for businesses, professionals, and consumers alike.
Complaints filed by industry in the U.S.
Though no profession or industry is without its complaints, there are a handful of industries that tend to top the yearly lists from reports on consumer complaints. For example, the Consumer Federation of America reported that 2020’s most complained-about industries included automotive retail/service, home improvement/construction, credit lending, and professional services like plumbing and photography. Unsurprisingly, fraud schemes and phone scams also consistently rank among the most complained-about industries.
The Florida Department of Agriculture and Consumer Services, for example, receives numerous complaints about telemarketing fraud every year. One such complaint, captured in the 2020 CFA report, was from a man who had received a call from somebody claiming to represent Medicare. The caller offered the man a free knee sleeve before asking for his Medicare number, at which point the complainant decided to report the call.
Fraud-related complaints like these have surged since the outbreak of COVID-19, according to the report. Many of these complaints have been levied against retailers and professionals claiming to sell products or services that “kill” the novel coronavirus. The New Mexico Attorney General’s Office, for example, received notice about an HVAC service provider that “falsely claimed it could install an air purification system with UVA lighting to kill the COVID-19 virus.”
Complaints related to COVID-19 have also popped up in many industries outside of fraud. Pandemic-related complaints filed in 2020 have involved price gouging, refunds for cancelling vacation rentals, and delivery problems caused by supply-chain disruptions. The Fairfax County Department of Cable and Consumer Services saw 41 complaints involving trash companies, who found themselves short-staffed and unable to pick up trash on time as workers became exposed to COVID-19.
Where else are complaints filed?
Outside of the pandemic, e-commerce has seen rapid growth in complaints filed over the past few years. In 2019, the Washington Attorney General’s Office published a report finding that the state’s consumers complained more about e-commerce than any other industry. Analyzing seven years of data, the office found that Amazon was the subject of 1,760 complaints, comprising about 26% of the total complaints for e-commerce as an industry and trailing only Comcast and CenturyLink in numbers.
The same data from the Washington office shows that outside of e-commerce, 2019’s most complained-about industries included the usual suspects: auto sales (1,136 complaints), broadband providers (834 complaints), telecommunications (1,387 complaints), and retail sales (1,046 complaints). Interestingly, the number of total complaints had decreased in 2019 before ostensibly spiking again in response to the COVID-19 pandemic.
New consumer protections: how do regulators respond to complaints?
The ways regulators respond to complaints can be hugely consequential for their industries overall. One of the most common regulatory responses to complaints in 2020 was the implementation of price gouging measures in different states. In California, the San Francisco District Attorney’s Office established a Price Gouging Task Force to address complaints within the city. States like Maryland, Massachusetts, and New York took similar measures to help protect consumers.
Because of how dense the subject matter is, we will discuss in future posts how the regulatory response to complaints can impact businesses, consumers, and professionals. The filing of complaints, however, remains an important tool for citizens to hold their service providers accountable and to communicate with regulators about the dangers and burdens they face daily. It will always be a crucial way for regulators to learn about issues and trends in their industry so they can better serve their public interest.