The entire morning was dedicated to addressing fraud and in particular how it impacts minority communities. In 2015 an FTC Study revealed an estimated 10.8 percent of U.S. adults – roughly 25.6 million people – were victims of fraud. That's a huge number of people, but what is even more startling is, the study showed that African American and Latino consumers were more than twice as likely to become fraud victims than non-Hispanic whites. That conclusion is at best a guess… and that's due mostly to the fact that problems/issues with fraud, in those communities are more than likely being under reported.
So – what's happening? There are numerous scams that deliberately target minority communities. But, in reference to fraud, at the heart of the matter in the African American and Latino communities there is the need to work and generate income. Fraudsters play to that, as an example, there are pyramid schemes, great job opportunities, or the chance to get in on ground floor with a business opportunity. Issues with debt are also open doors for certain scams; credit repair, debt relief schemes, mortgage relief fraud, and advance fee loans.
The study found, in the Latino community specifically, there is often a language barrier; taking advantage of that, and adding a healthy dose of fear the con artist has found this to be an effective way to quickly intimidate people – especially immigrants. They will impersonate a government official – threaten fines, arrest, or deportation and demand immediate payment.
The results also showed with African Americans there is no language issue that show as an indicator of what fraud issues that community faces; but it did indicate economics is a factor. Researchers, identified debt-related frauds as disproportionately affecting the community. Individuals and companies target African Americans; advertising government-endorsed mortgage assistance programs, phony credit repair and debt relief scams.
As I mentioned earlier these crimes are being underreported by minority communities. Part of the reason it appears there is a general reluctance and embarrassment to report the fraud by filing a complaint. Also it is very probable African American and Latino consumers distrust the government, think their complaints will not make a difference, have concerns about their immigration status, or they simply don't know where to file a complaint.
What's being done? Step one, the FTC working with partners like those attending the conference, is mounting a campaign to encourage people to talk about and report fraud in their communities. As I see it – talking about fraud helps people avoid being scammed.
The FTC also plans to step up its monitoring of advertising aimed at minority communities. And again working with its partners, the media, and law enforcement, they plan to increase consumer outreach and education in the African American and Latino communities.
Source: Published originally on Better Business Bureau, African Americans and Latinos today's fraud targets, byDennis Horton, November 2, 2016.