Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, October 22, 1995 TAG: 9510230058
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: MIKE HUDSON STAFF WRITER
DATELINE: LENGTH: Long
If you want to complain to Virginia's consumer-protection watchdogs about telemarketing fraud, shady home-repair deals or other scams, you'll have to do it on your own nickel.
This summer the state's consumer office shut down its toll-free hot line - which had been getting about 3,000 citizen calls a month.
Gov. George Allen didn't put in funding for the hot line in his state budget proposal last winter, and a Democratic bill to restore funding for the "800" number failed to move beyond a General Assembly subcommittee.
Carlton Courter, state commissioner of agriculture and consumer services, says the consumer hot line "was just not a priority with the agency."
The agency pulled the plug on July 1.
The hot line's shutdown comes as the state is also making deep cuts in jobs and money dedicated to enforcing consumer laws.
Del. Mitchell Van Yahres - a Charlottesville Democrat who tried unsuccessfully to get the consumer hotline restored - charges that the Allen administration has little concern for fighting false advertising and other marketplace misconduct. He says its attitude is "consumer beware - consumer be damned."
Courter, who heads the consumer office's parent agency, the Department of Agriculture and Consumer Services, says the state is still committed to protecting consumers. He says the entire department is "re-engineering" to better serve its customers - consumers and farmers alike.
"I'm not running or shirking those responsibilities toward consumer protection," Courter says.
Courter notes that the hot line's survival had been shaky even during Democratic administrations. It was cut off in late 1990 under then-Gov. Douglas Wilder. But it was resurrected in July 1994 after Van Yahres and other Democratic legislators put in specific funding. The hotline costs about $70,000 a year to run.
Courter says the hotline shutoff won't hurt the state's overall efforts to fight fraud and other marketplace wrongdoing. He says the consumer office still has two regular phone lines coming in - which were already taking nearly three-quarters of the calls to the agency.
But consumer activists complain that the loss of the hotline and other cuts at the Department of Agriculture and Consumer Services have gutted what was already a tiny consumer-protection force.
A study released last month by the Virginia Citizens Consumer Coalition reported that the department plans to reduce its number of consumer-affairs positions - which totaled 27 before Allen's election - to 13 by next summer.
The report claims the agency's cuts will leave consumers more vulnerable to shady operators: "When Gov. Allen declared that 'Virginia is open for business,' surely he did not mean to include in his welcome fly-by-night contractors, disappearing health spas, bait-and-switch advertisers, telemarketing thieves, auto-repair rip-offs and other violators of law who siphon consumer dollars away from reputable businesses."
Asked about the figures on consumer staff cuts in the advocacy group's report, Courter says, "I'm not going to contest that - but it's something of a moving target." He expects the final total for consumer staffing to be closer to 15 than 13.
During the current round of budget reductions, the consumer office will take about a 35 percent cut in staff. Overall, the agriculture department will lose 14 percent of its work force.
"We've made hard decisions in all areas," Courter says. "We've shared that pain across the whole agency."
He says the department is shifting from six divisions to three; the consumer office will now be under the Division of Consumer Protection, which will include offices regulating meat, milk and other farm products.
Much of state government's responsibility for protecting consumers lies with the Department of Agriculture and Consumer Services. The agency regulates telemarketers, charities, car-repair shops and many other businesses. It generally has received 3,000 to 5,000 consumer complaints a year, along with many more requests for information or advice.
Attorney General Jim Gilmore also enforces consumer laws, but often depends on the Agriculture Department to field the first complaints and start investigations.
The Agriculture Department's consumer office played a key role in an investigation of Smoky Mountain Secrets Inc., a telemarketer that is now the target of a fraud lawsuit filed by Gilmore. The company took in nearly $4 million from Virginians in 1993, the suit says, by falsely promising most of the profits from the sales of its jams and jellies would help police fight drugs.
After getting complaints, the consumer office sent an undercover investigator to work in the company's phone room in the spring of 1994 and then turned over its findings to the attorney general's office.
Consumer advocates say the agency won't have enough people to do those kinds of investigations in the future.
David Rubinstein, who directs the Virginia Poverty Law Center, says the consumer-affairs cuts hurt because citizens who have complaints already have few places to go. Disputes over a $600 refrigerator or a $2,000 used car don't involve enough money to attract private attorneys, and Legal Aid clinics for the poor are already overwhelmed and facing more federal budget cuts.
Courter says the consumer office will have eight people - two investigators, two regulatory staffers, a mediator and three phone operators - who can help investigate consumer cases.
"We're going to continue to build cases that will go forward to the attorney general for prosecution," Courter says.
Other agencies - such as the new Motor Vehicle Dealer Board - also enforce some consumer laws, but none have as much authority as the Agriculture Department. In fact, industry lobbyists responded to criticisms of the auto-dealers licensing board by suggesting the Agriculture Department could handle many complaints from car buyers.
But Jean Ann Fox, president of the state consumer council, says there won't be enough people at the Agriculture Department's consumer office to handle the calls it already gets, much less take up slack for other agencies.
"That's like bait and switch," Fox says, "if they tell you can go there for help and nobody's going to be there to help you."
Virginia Office Of Consumer Affairs
Parent agency: Department of Agriculture and Consumer Services.
Formerly: Division of Consumer Affairs.
Duties:
-- enforces state consumer laws, including those policing health spas, rent-to-own stores, charitable solicitators, cemetery-plot sales and car repair businesses.
-- investigates complaints of fraudulent, deceptive or dangerous trade practices.
-- promotes consumer education and informs public about new laws and policies affecting consumers.
Staff size:
1993: 27
1996 (projected): 15
Telephone number for consumer complaints and questions: 804-786-2042 (8:30 a.m. - 5 p.m Monday - Friday).
by CNB