Disclosure • Division of Consumer Protection will not allow the public to inspect complaints lodged against businesses.
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If you want to check out the legitimacy of a company you’re thinking of patronizing, you can look over customer complaints filed with the Better Business Bureau or scour news sites or blogs.
But you can’t inspect complaints lodged with the one Utah state agency created specifically to protect and warn consumers about shady companies. The Division of Consumer Protection treats that information as confidential.
Such secrecy is harming — not helping — consumers, according to the nonprofit Truth in Advertising news and advocacy organization, which was blocked by the state in its attempts to obtain copies of consumer complaints against a Provo-based multi-level marketing company.
A records request for the information — with personal identifying information redacted — was denied by the division in a decision recently upheld by the State Records Committee.
“It’s definitely unique, surprising and disappointing to us,” says Laura Smith, an attorney for Truth in Advertising.
She points to the Federal Trade Commission, saying that agency “has never once” refused requests for disclosure of consumer complaints. And most states readily supply such records.
Utah’s policy is troubling, according to Truth in Advertising, because state investigations can take months or years. Moreover, if the agency does investigate and determines there’s been no violation of law, even if “1,000 consumers had terrible experiences with the company, no one would know about it,” said Smith.
But the division insists it would be breaking the law if it publicly released consumer complaints. It points to a provision of state code that prohibits the agency from disclosing “the identity of a person investigated unless his identity has become a matter of public record in an enforcement proceeding or he has consented to public disclosure.”
Division officials informed Truth in Advertising that it had taken no enforcement action against the Provo company Wake Up Now, but would neither confirm nor deny it had received any customer complaints, let alone disclose the contents of such complaints.
The flip side to protecting consumers is to protect legitimate, law-abiding businesses, said the division’s legal counsel, assistant attorney general Chè Arguello.
“I believe in innocent until proven guilty — that’s really at issue here,” Arguello argued Thursday before the State Records Committee. “The fact that there may or may not be 1,000 complaints against a company is in my opinion, with respect to public information, irrelevant.”
Arguello said the division is “not a blogger” that can simply put out information it hasn’t verified.
“We are a government entity charged with investigating consumer complaints. … Disclosing that could cause significant harm for legitimate businesses.
“It doesn’t matter who you are — you could be the best actor in the world, the best business in the world — there’s going to be a segment of the population that is going to be disgruntled,” he said, adding that it would be irresponsible to “give voice to those disgruntled” people by disclosing unsubstantiated allegations.
“If [the division] receives complaints and believes they are meritorious and some sort of enforcement action is warranted, then they will take that,” Arguello assured. “Let us let the agency charged with investigating these do its job and bring to light publicly [only] those investigations that are warranted under the law.”
Smith disputed that the division would be putting any state “stamp of approval” on complaints by disclosing them. Instead, it would simply be providing information that others had passed along and that could help prevent consumers from being scammed.
“The division’s reading of the statute would allow it to operate in secrecy so no one would ever know what’s happening with consumer complaints. It’s also allowing the agency to filter what small pieces of information consumers have a right to know,” Smith said. “Consumers have the right to know all the information they can obtain about a company before they enter into a transaction with it.”
State Records Committee members, though, voted unanimously to uphold the division’s decision to withhold consumer complaints as non-public records. They accepted Arguello’s argument that the filing of a consumer complaint was the first step in an investigation, triggering the law barring disclosure of the identity of a company that was investigated.
Truth in Advertising isn’t certain whether it will appeal the ruling to state court because of the costs and resources required.
“It’s tough because we’re a nonprofit organization,” Smith said.
Additionally, the organization faces another battle with the division in coming weeks.
It expects to argue an appeal before the Records Committee at a December hearing over the division’s refusing to disclose consumer complaints against another company, Vapex LLC, of Bountiful, which sells e-cigarettes online.
Unlike in the case of Wake Up Now, which has not been the subject of enforcement action, Vapex has been cited by the division with 329 counts of violating state consumer laws. Although the division put out that information in a news release, and referred to more than 89 consumer complaints lodged against the company, it has refused to disclose the complaints to Truth in Advertising.
By Dan Harrie The Salt Lake Tribune · November 17, 2014 9:32 am
The Provo-based multi-level marketing company that sells financial software, weight-loss and fitness products and energy drinks has not been the subject of any enforcement action by the state. The Federal Trade Commission has received 160-plus complaints against the company, according to Truth in Advertising, which says the company relies heavily on recruitment of distributors. The Better Business Bureau has logged more than five dozen customer complaints against the company in the past three years, but gives the business a C grade because it has made “good faith” efforts to refund disputed charges or address other gripes. Jeff VanDyke, compliance director for the 5-year-old company, said Wake Up Now has a “very liberal refund policy” and strives to make sure complaints are addressed.
