[co-author: Alexandria Pritchett]

The Federal Trade Commission (FTC) recently released a “Serving Communities of Color” report that details fraud and consumer issues that have a disproportionately negative impact on communities of color. This report is the latest installment released by the FTC on the topic and follows prior initiatives, such as the 2014 “Every Community Initiative” that helped the FTC develop a strategic plan for addressing disparities in communities of color and the June 2016 “Combating Fraud in African-American and Latino 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 last five years to address and understand consumer issues that have disproportionately impacted these communities. The report explains that the FTC filed more than 25 actions involving alleged conduct that either targeted or disproportionately impacted communities of color. The report includes 10 main law enforcement areas affecting communities of color: automobile buying; for-profit school advertising; marketing prepaid cards; government impersonators; marketing for inmate services; jobs and money-making opportunities; credit, background checks; access to housing; and payday loans and debt collection.

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

Within Majority Latino Communities

• Majority white and Latino communities were more susceptible to impersonator scams, while majority Black communities faced issues with credit bureaus at higher rates.
• When compared against majority white communities, majority Latino 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 that revealed typical cases for consumers in majority Black communities involved issues with, among other things, payday loan applications, student debt relief programs, and money-making schemes, such as false “work-at-home-business opportunities” and “employment scams” where scammers promise large profits for selling certain products.

Within Both Majority Black and Latino Communities

• Reports from majority Black and Latino communities show that these groups are more likely to pay scammers in ways that have few, if any, fraud protections by paying with the following: cash, cryptocurrency, money orders, and debit cards. In contrast, reports from majority white communities show that this group is more likely to pay scammers with credit cards.

Additionally, the report emphasizes that outreach programs are an integral part of the FTC’s work to protect and educate consumers in all communities. The FTC notes that it has grown its outreach efforts to reach communities of color by listening to and working with trusted sources in those communities to deliver consumer protection messages in an effective way. Additionally, the FTC has furthered 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 helpful information to those effected financially by COVID-19.

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