On March 15, the Federal Trade Commission (FTC) submitted a report to Congress discussing its findings regarding the frauds, scams, and bad business practices that affect American Indian and Alaska Native (AI/AN) communities and the FTC’s efforts to address these issues. Specifically, the FTC asserts that auto purchasing and financing, predatory lending, impersonation scams, tech support scams, and romance scams are top concerns. This report was submitted pursuant to § 402(a) of the Protecting Indian Tribes from Scams Act of 2022.

As background, in 2022, the FTC prioritized efforts to gain a broader understanding of the consumer protection challenges experienced by AI/AN communities. These efforts included collaborating with tribal government leaders, business leaders, advocacy groups, legal aid offices, and community media. The FTC also analyzed its data to identify fraud trends reported by AI/AN individuals.

Some findings in the report included:

  • Problems with auto purchasing and financing.
    • Specifically, deceptive advertising and a lack of clarity around fees at the dealership.
    • Advocates emphasized the need to raise awareness, potentially through AI/AN radio, to counter deceptive claims made in auto advertisements.
  • Prevalence of predatory lending.
    • One organization pointed out that AI/AN populations are more likely to be un- or underbanked than other racial and ethnic groups in the U.S. Unbanked individuals may look outside the traditional banking system for loans, potentially exposing them to predatory lending practices.
    • According to the FTC, vigorous enforcement of consumer protection and fair lending laws is needed to combat this coupled with consumer education that informs consumers of their rights and promotes financial literacy.
  • Money lost to fraud.
    • Between 2018 and 2022, people living in majority AI/AN communities reported losses to fraud totaling $12.5 million.
    • The reported fraud of people in majority AI/AN communities are similar to those reported by people in other communities. Government impersonation scams were the most common followed by prize, sweepstakes, and lottery scams.
    • Many of the legal aid attorneys stressed the importance of having consumer education resources in-language and suggested communicating scam alerts through tribal government agencies.

Going forward, the FTC vowed to continue to fight against the frauds and scams facing AI/AN populations, and return money to those affected, when possible. However, it noted that its ability to seek monetary relief for harmed consumers was substantially limited by the 2021 U.S. Supreme Court ruling in AMG Capital Management, LLC v. FTC. As discussed here, in AMG Capital Management, the Supreme Court held that the FTC does not have authority under the Federal Trade Commission Act § 13(b) to seek, nor does a court have authority to award, equitable monetary relief, such as restitution or disgorgement. Prior to the ruling, the FTC claims it had used its § 13(b) authority to provide billions of dollars in restitution to consumers affected by unfair or deceptive practices, including people in historically underserved communities.

However, after this ruling, the FTC may still seek monetary penalties and relief under the more difficult standards of §§ 5 and 19 of the FTC Act which — unlike § 13(b) — require proof of repeated violations and mens rea. The FTC noted that it has continued to exercise this authority in cases brought against companies with practices affecting AI/AN communities, in addition to issuing four notices of proposed rulemaking intended to ameliorate concerns identified in the report. While the FTC may be constrained in its ability to seek redress following the AMG Capital Management ruling, it does still vow to continue to educate the public, including AI/AN communities, about spotting, avoiding, and reporting scams, frauds, and bad business practices