FTC Report Highlights Disproportionate Impact of Consumer Fraud on Minority Communities | Man’s pepper with trout


[co-author: Alexandria Pritchett]

The Federal Trade Commission (FTC) recently released a “Serving Communities of Color” report which details fraud and consumer issues that have a disproportionately negative impact on communities of color. This report is the latest installment published by the FTC on the subject and follows on from earlier initiatives, such as the 2014 “Each community initiative“which helped the FTC develop a strategic plan to tackle disparities in communities of color and the June 2016″ Combating Fraud in African American and Latin American Communities ” report, which focused on reducing fraud in black and Latino communities.

The report focuses its findings on black and Latino communities and summarizes the FTC’s efforts over the past five years to address and understand the substance use issues that have disproportionately impacted these communities. The report explains that the FTC has filed more than 25 lawsuits involving alleged conduct targeting or disproportionately affecting communities of color. The report includes 10 main areas of law enforcement affecting communities of color: auto purchasing; for-profit school advertising; marketing of prepaid cards; government imitators; marketing for inmate services; jobs and lucrative opportunities; credit, background check; access to housing; and payday loans and debt collection.

Some of the most relevant insights from the 2021 report data include:

Within the Latin majority communities

  • Predominantly white and Latino communities were more susceptible to impersonator scams, while predominantly black communities faced issues with credit bureaus at higher rates.
  • Compared to predominantly white communities, predominantly Latin American communities filed more reports related to credit bureaus, banks and lenders, debt collection, auto issues, and business opportunities.

Within majority black communities

  • The FTC analyzed 23 cases which found that typical consumer cases in predominantly black communities involved issues with, among other things, payday loan applications, student debt relief programs, and money-making programs. such as bogus “work from home opportunities.” And “employment scams” ​​where crooks promise big profits for selling certain products.

In predominantly black and Latino communities

  • Reports from the majority of black and Latino communities show that these groups are more likely to pay scammers with little or no protection from fraud by paying with the following: cash, cryptocurrency, money orders, and debit cards. In contrast, reports from predominantly white communities show that this group is more likely to pay scammers with credit cards.

Additionally, the report emphasizes that awareness programs are an integral part of the FTC’s work to protect and educate consumers in all communities. The FTC notes that it has stepped up its outreach efforts to reach communities of color by listening and working with trusted sources in those communities to effectively deliver consumer protection messages. In addition, the FTC continued its community outreach efforts by working with national and local minority organizations to educate consumers, create consumer education materials in multiple formats and languages, and create educational materials to alert people to scams and offer useful information to those financially affected by COVID-19[FEMININE[FEMININE

The report is another example of the FTC’s focus on fraud disparities and consumer issues facing minority communities.


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