FTC: Scammers Targeting Minority Communities

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Earlier this month, a Bangladeshi Muslim woman living in Maryland responded to an advertisement for online work. She needed an extra income, and the advertisement looked promising. When she contacted the job provider, she was told to wire $6,000 to the company for supplies she needed for the job, including a laptop computer. The company reimbursed her with a check for the full amount beforehand, so she felt comfortable and wired the money. A few days after wiring the money, her bank contacted her and said the $6,000 check she deposited was fraudulent. The “online job” was a scam. The money she wired was unrecoverable.

Cases like this abound across the nation, and data on scams collected by the Federal Trade Commission and state consumer protection agencies show a clear trend: most scams occur against African-Americans and members of minority communities. Minorities are especially susceptible to government imposters because they are often hesitant to interact with the government. Scammers also take advantage of their victims' difficulty in understanding English.

The Muslim Link and other minority media outlets met with officials from the Federal Trade Commission’s Division of Consumer Response and Operations, the District of Columbia’s Office of Consumer Protection, and non-profit legal advocacy groups for a briefing and discussion on “spotting and avoiding scams targeting diverse communities” on April 18, 2017 at the office of the Attorney General for the District of Columbia.

Several dozen media outlets serving Latino, Asian, and other minority communities attended the two hour meeting organized by New America Media, a national collaborative of over 3,000 ethnic media outlets.

Monica Vaca, Acting Associate Director for the FTC’s Division of Consumer Response and Operations, said the FTC’s large database on scams is available to the public. Highlighting some of what the data reveals, Vaca said “seventy-two percent of scams start with a telephone call” and that most scams involve wire transfers. The most prevalent scams are fraudulent debt collection firms and imposters posing as federal government employees from agencies like the Internal Revenue Service (IRS) or the Immigration and Customs Enforcement (ICE). The FTC database shows about three million scams reported in 2016.

Despite FTC data showing scammers disproportionately target minority communities, “scams are underreported in the Latino and African-American communities,” said Vaca. “We don’t know about a scam unless people tell us about it.”

Vaca and the other government officials said minority media outlets should encourage their communities to be vocal and open about scams, especially if they are the victims. If scam artists or fraud firms end up in court, testimony from victims helps make a strong case.

In January of this year, the FTC mailed checks to nearly 350,000 people who lost money running Herbalife businesses. A July 2016 settlement with the FTC required Herbalife to pay $200 million and fundamentally restructure its business. “This represents one of the largest redress distributions the agency has made in any consumer protection action to date,” the FTC said in a press release.

Heather Hodges, a pro bono counsel for Neighborhood Legal Services of Washington DC, said that scams are not limited to imposters and cold call “debt collectors.” Landlords who do not fix housing code violations while collecting money from renters, for profit universities who recruit students using promises of jobs and guaranteed success, and fraudulent credit repair services are common scams which victimize poor neighborhoods in Washington DC. “This class of consumer is extremely unlikely to complain [so] it makes it even harder [to help them get justice],” said Philip Ziperman, the Director of the District’s Office of Consumer Protection.

One representative of Latino media cautioned his media colleagues to be responsible for the advertising dollars they accept. “Sometimes we [minority media] are the carriers of [the scammers’] message,” he said.

With the FTC, state and local consumer agencies, non-profit advocacy organizations, and the FBI among the myriad of groups dealing with consumer fraud, the Muslim Link asked if there was one single agency a scam victim should call. After several unclear answers, one government representative said the best thing would be to call “everyone.”

For the FTC, call 1-877-FTC-HELP. For the Office of Consumer Protection for the District of Columbia, call (202) 442-9828. The Consumer Protection Division for the Maryland Attorney General’s Office can be reached at 888-743-0023. The Better Business Bureau maintains an online scam tracker at bbb.org/scamtracker .

If you have been the victim of a scam, the Muslim Link would like to hear your story. It might help save others from the same or similar scams. Email editor@muslimlinkpaper.com if you have a story to share.