Reuters Money

Consumers are always under fire, whether it’s from scams or deceptive marketing, defective products or foods that make them sick.

But now the state agencies to which they turn for redress are under fire themselves. In New Hampshire, the state’s Consumer Affairs office has been recommended for elimination by legislators trying to balance the state budget. The office fields about 7,500 complaints a year.

Consumers in Nevada are already doing without, after their Consumer Affairs Division was stripped of funding and “temporarily” shut down more than a year ago.

It’s not that consumers are becoming less of a target or need these offices less. Complaints collected nationally by the Federal Trade Commission have quadrupled since 2001, rising every year through 2009 and leveling off at 1.3 million last year.

Nevada’s office worked on dispute resolution, offering mediation between businesses and consumers and also was responsible for investigating deceptive trade practices and looking for patterns of fraud.

Now, instead of that, a state fraud task force helps consumers try to find agencies who could pick up some of the slack. Their list includes the FTC, which specifically does not engage in consumer dispute resolution.

David Vladeck, who head the FTC’s Bureau of Consumer Protection, said he welcomes states pushing complaints to his agency, but consumers shouldn’t expect help resolving their individual problems.

“We’re not a substitute for a local agency,” he said. “A complaint (to the FTC) about a local dry cleaner is going to go into the hyperspace.”

The FTC mostly collects data and deals with larger scale problems. When there is a resolution, it’s a big picture fix, addressing practices at a broad level and not individual consumer issues. At best, it could result in some restitution as part of whatever settlement was reached.

Moves to shut down consumer agencies — as the economy continues to sputter and spur more scams — have not gone over well with those who make a living trying to help consumers.

“This is very unfortunate for consumers in Nevada and a shortsighted decision on the part of  Nevada state officials,” said Sally Greenberg, executive director of the National Consumers League. “In fact, when the economy is at its weakest, that’s when consumers most need assistance from a state office of consumer affairs. That is the place to call to get help to pay off credit cards, learn about how to avoid scams, help identify dishonest businesses, and get advice on how to make good financial decisions. Consumer affairs offices are not a luxury, they are a necessity in hard times.”

Ed Mierzwinski, consumer program director for U.S. PIRG, agreed the issue of consumer protection becomes more pronounced in a down economy.

“We always need consumer protection. When the economy collapsed we saw that no regulation costs more than regulation,” he said. “Also, we arguably need state consumer agencies — who are closer to the public than federal agencies –  more in a bad economy than a good economy. In a recession, more bad guys come out and try even harder to take your money, when you are already down — foreclosure rescue scams, debt settlement ripoffs, get-rich-quick schemes and sadly, even Japan or radiation protection hoaxes.”