Agency asks legislature for additional employees to curb consumer fraud

Kiley Russell

Thursday, Feb. 11, 1999 | 9:13 a.m.

CARSON CITY - Lawmakers are skeptical about a request by the attorney general's office for two more consumer protection staffers it says will help keep Nevadans safe from disreputable companies.

The Assembly Ways and Means Committee was asked Wednesday to endorse the new positions - and override a recommendation against the new employees by Gov. Kenny Guinn.

"We did ask for an additional investigator and attorney that we did not get," said Fred Schmidt, consumer advocate in the attorney general's office.

Schmidt said he needs the new hires to increase the number of shady companies his division investigates and takes to court.

"Even those (cases) that could be litigated and could provide added moneys we do not do because we don't have enough attorneys," he told the committee.

He added that as the March 1, 2000, deadline for electric industry deregulation approaches, his office will need additional staff to cope with the dozens of new utilities expected to flood into the state.

Schmidt used the example of deregulation in the long-distance telephone market to illustrate what might soon happen to the electric industry in Nevada.

"Given the amount of fraud and customer problems that had taken place in the long-distance market after deregulation and given that long-distance revenue nationwide was less that half of what the electric utility market is, we expect the amount of fraud to increase," Schmidt said after the hearing.

He told the committee that his consumer fraud employees actually make money for the state by imposing fines or winning judgments in lawsuits against rogue companies.

The division collected more than $1 million from wayward telemarketing, utilities and securities companies during the last 15 months, officials told the committee.

Still, lawmakers remained skeptical of the new positions, which would increase the division's two-year, $2 million budget by nearly $300,000.

"The performance indicators don't justify the money you are asking for," said Committee Chairman Morse Arberry, D-Los Vegas.

"They are saying, 'Give me the bodies and the money will come.' I'm saying, 'Show me,"' Arberry said later.