WASHINGTON, D.C. — People of color who are hit by scammers or unfair business practices often have less financial protection than white people, according to a new government report.
The Federal Trade Commission staff report also found minority communities were more likely to be affected by certain scams like loan and debt collectors.
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According to the report, black communities are filing consumer complaints at a higher rate than White or Laltino communities. It goes on to say the COVID-19 pandemic has only exacerbated those disparities.
When they do lose money, the report states Black and Latino communities often have less financial protection because they pay more more with cash, debit cards, or money orders.
New FTC staff report outlines impact of fraud on communities of color: https://t.co/30iTMRNSrl
— FTC (@FTC) October 15, 2021
White Americans report using more credit cards, which often have stronger fraud protection.
“Folks who live in majority Black and Latino communities tell us that they’re paying with less secure payment methods,” said Monica Vaca with the FTC’s Bureau of Consumer Protection. “Things like money transfers or gift cards of cash, some of the ways that are harder to recover.”
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The differences also come down to the types of scams impacting minorities.
The report found that black communities had a 190 percent higher rate of being targeted for student loan debt relief scams than non-black areas.
Marking for scam prepaid cards also targeted more Black and Spanish-speaking communities.
Blacks and Latinos are also dealing with more unfair business practices when buying cars, according to the report, often leading to higher prices.
“Scammers are going to be opportunistic,” Vaca said. “They’re going to look for every chance that they can to go after somebody, and what’s important for us to know is how is this hitting different communities?”
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Since the start of the pandemic, the FTC has sent out hundreds of warning letters to marketers found to be unfairly targeting minority communities.
The FTC has also brought more than 25 legal actions against potential scammers or unfair business practices that specifically target communities of color over the last five years.
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