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.

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Photo of Alexandria Pritchett Alexandria Pritchett

Alexandria is an associate in the firm’s Consumer Financial Services practice. She recently graduated from the University of San Diego School of Law, where she completed her J.D. and served as president of the Black Law Students Association. 

 

While in law school, Alexandria 

Alexandria is an associate in the firm’s Consumer Financial Services practice. She recently graduated from the University of San Diego School of Law, where she completed her J.D. and served as president of the Black Law Students Association. 

 

While in law school, Alexandria served as a certified legal intern for the San Diego Public Defender’s Office. She also served as a corporate counsel intern for AMN Healthcare and judicial extern for the Hon. Cynthia Bashant of the U.S. District Court of the Southern District of California. Alexandria earned her B.A., cum laude, from Syracuse University. 

 

At USD Law, Alexandria was admitted into the Order of Barristers and received CALI Excellence Awards in the following courses: Legal writing and research, Jurisprudence, and Civil Rights Theories.

**Licensed to practice in California.

Photo of Alan D. Wingfield Alan D. Wingfield

Alan Wingfield is a partner in the firm’s Consumer Financial Services practice, with a focus on Financial Services Litigation and consumer law compliance counseling. Alan has represented businesses in many venues nationally in class action and individual consumer litigation. Alan’s practice includes compliance…

Alan Wingfield is a partner in the firm’s Consumer Financial Services practice, with a focus on Financial Services Litigation and consumer law compliance counseling. Alan has represented businesses in many venues nationally in class action and individual consumer litigation. Alan’s practice includes compliance counseling to help businesses with the myriad federal and state consumer protection laws and laws regulating financial services companies.

Photo of David N. Anthony David N. Anthony

David is an experienced trial attorney with a concentration in litigating financial services and business disputes, including class actions related to the FCRA, FDCPA, TCPA and other consumer protection statutes.

Photo of Chris Capurso Chris Capurso

Chris’ practice focuses on consumer financial services law, primarily on federal and state law compliance matters. Chris regularly advises financial institutions, lenders, and sales finance companies in the development and maintenance of closed-end and open-end lending, automobile finance, fintech, point-of-sale, small dollar, and…

Chris’ practice focuses on consumer financial services law, primarily on federal and state law compliance matters. Chris regularly advises financial institutions, lenders, and sales finance companies in the development and maintenance of closed-end and open-end lending, automobile finance, fintech, point-of-sale, small dollar, and other credit programs. He provides guidance on federal consumer protection laws and regulations, including TILA, ECOA, ESIGN, and GLBA.