Blacks, Latinos More Vulnerable to Consumer Fraud

Sandy Close. Photo from encore.org

African Americans and Hispanics continue to be victimized by consumer scams at li slier rates than white Americans but are more reluctant to report their experiences, according to the Federal Trade Commission (FTC) officials lathered in Milwaukee. Wis.

“African Americans are almost twice as likely to be victims of consumer fraud as whites.” said Todd Kossow, FTC’s Midwest Regional Director, noting that Hispanics also are victimized “at a significantly higher rate than whites.”

He listed debt-related scams hat hold out the hope of avoiding foreclosure, paying down student loans, and credit card debt among the leading monetary enticements that lure poor, low-income, or otherwise financially marginal individuals to grasp at the false promises of solvency and freedom from creditors.

Kossow led off a discussion on consumer fraud with other FTC officials and an all-star panel of experts drawn from federal agencies, including 1RS Criminal Investigations, the U.S. Attorney’s Office Elder Justice Initiative. U.S. Postal Inspector Service, and the Federal Deposit Insurance Corporation.

They were joined by a representative from Wisconsin’s Department of Transportation’s auto division, other state and Milwaukee city agencies, including the Milwaukee Public School District, as well as local participants from consumer advocacy organizations like the AARP. and the Better Business Bureau. Media also attended the event, held at Milwaukee’s Washington Park Branch Library.

Sandy Close, founder of Ethnic Media Services, termed the symposium “a convening of fraud busters in order to create a community of informed advocates. Local media are vital to this effort.” EMS. a San Francisco organization that serves ethnic media, has cohosted similar events with the Federal Trade Commission for over three years in cities across the country. The magnitude of the crisis is pervasive and daunting.

Kossow said the latest data show that 11 percent of America’s adult population, or approximately 25.6 million people. were victims of scams in one year alone. Though reporting can be done anonymously, African Americans and His- panics have been less likely to report fraud, making it more difficult for enforcement officials to alert consumers to the latest scams. That underreporting prompted an FTC report.

In Milwaukee, and throughout the country, imposter scams comprise the greatest number of consumer fraud events: “any scam where someone pretends to be who they are not in order to get your money.” Kossow explained.

These scams are often initiated over the phone by an individual who claims to be an 1RS agent, or is calling from the Social Security Administration, from a well-known institutional authority or reputable corporation. Also proliferating are technical support scams, where the caller convinces a consumer that a computer or a piece of equipment needs a patch or adjustment of some kind.

Aside from fraudulent schemes that can potentially affect any consumer, there are scams rooted in bitter legacies of discrimination, for example, when banks, through redlining, declined to offer mortgages to African Americans seeking to live in certain neighborhoods or zip codes.

Insurance companies likewise shirked legal obligations behind the veneer of prudently avoiding doing business with “high-risk individuals,” the not so discreet tenu for people of predominantly non-European descent, or. who. if then insured. were charged exorbitant rates.

Jessica Roulette, an attorney at Legal Action of Wisconsin, and a native of Milwaukee, spoke to the ramifications of this history’. “Scammers prey on the effects of structural racism. the fact that minorities have been excluded from our banking system: excluded from home ownership.” She cited the 2008 financial crisis as but one fairly recent example of how financially unsophisticated. low-income consumers, were steered into burdensome mortgages designed to fail.

She outlined how structural inequities have affected minority and poor communities in her city and continue to impede home ownership, the primary means of the transfer of intergenerational wealth in America.

Immigrants also, especially those who have functioned outside the traditional banking system, are vulnerable to these types of scams. Without community members sharing their knowledge and gaining an understanding of their rights, simply put. Roulette said, “it’s easy to be deceived.”

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