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Caldwell: Consumers cashing in despite cutbacks

Sun., March 13, 2011

Washington Consumer Resource Centers manned by fewer than one dozen staff members put $4.8 million back in consumer pockets last year.

That’s a significant drop from 2009, when almost $7.2 million was recovered, but the volume of consumer complaints also subsided, said Doug Walsh, head of consumer protection in the attorney general’s office.

He has no single explanation for the drop-off in inquiries, but Walsh says it has nothing to do with the elimination of centers in Spokane, the Tri-Cities and Tacoma.

The only vestige of a center east of the Cascades is a bilingual program specialist working out of Kennewick. The remaining outposts are in Vancouver, Seattle and Bellingham.

Despite the long distance to help, Walsh and Assistant Attorney General Jack Zurlini in Spokane say Inland Northwest residents are not getting shortchanged on consumer protection.

“It’s a much more efficient way of doing it,” Zurlini says.

He says his office has compensated for the Spokane center’s closure by working more closely with local law enforcement and the Better Business Bureau. “That agency does an incredible job,” he says.

Zurlini says consumers still call the former Spokane center’s number for help, but someone on the West Side picks up. The information goes into a database he and other assistant state attorneys review weekly to identify patterns that suggest somebody might be systematically abusing consumers.

When patterns are found, the attorneys get subpoenas for more information. About 160 investigations are ongoing at any time, Walsh says, with 25 to 40 leading to some kind of resolution each year.

Distressed homeowners looking for recourse against predatory lenders have been the biggest beneficiaries of Washington consumer protection efforts, thanks to the state’s participation in multibillion-dollar, multistate settlements with Countrywide Credit, Wells Fargo and others. More settlements are pending.

“We’ve had outstanding recoveries,” Walsh says.

Good thing, because the state’s share of the fees from big cases sustains about 40 percent of Washington consumer protection efforts, up from 20 percent a few years ago, he says.

Part of the reason for that is a cutback in his division’s budget from $10.6 million three years ago to $9.6 million today. The staff has been cut 15 percent, to 43.5 full-time equivalents.

But almost two-thirds of consumer complaints do not involve massive investigations, just a little mediation, Walsh says, generally not involving much more than a letter of inquiry.

Not surprisingly in these times, collection agencies have been the biggest alleged offenders the last couple years, followed closely by broadband service providers – cable networks, satellite television, etc.

Consumer protection does not handle landlord-tenant disputes, and advanced-fee fraud cases are routed to the Federal Trade Commission because they usually involve multistate chicanery.

Attorney General Rob McKenna says Washington consumers and businesses get a lot for a little out of the Consumer Resource Centers, and maybe Eastern Washington gets its share despite the office closures.

Government efficiency is a wondrous thing. But do all the calls have to be outbound?

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