Debt collection, student loan debt relief, payday loans, and government impersonators are just a few of the categories highlighted in a Federal Trade Commission report that analyzes the regulator’s effort at addressing fraud and consumer issues that are affecting communities of color, which was released earlier this week.
In the area of debt collection, the report notes that studies have found that communities of color are significantly more likely to have debts in collection and that the number of lawsuits filed against individuals to recover unpaid debts disproportionately affect African-Americans. The FTC highlighted the enforcement actions it has taken — filing or resolving seven debt collection cases against 39 defendants and obtaining $26 million in judgments in 2020 — as evidence of how it is protecting consumers from scammers.
The report also noted that people living in communities where the majority of individuals were either Latino or African-American were more likely to file complaints about debt collectors, banks, and credit bureaus than communities where the majority of individuals are White. Individuals in communities where the majority of people are African-American or Latino were also more likely to be scammed in ways that had fewer fraud protections, such as through money orders. Individuals in communities where the majority of people are White were more likely to be scammed when paying with credit cards, which “offer more robust fraud protection,” the FTC noted.
“Our mission is to protect every American consumer from fraud and other consumer problems, and to do so, it is vital that we build our understanding of how communities of color are affected by these issues,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a statement. “While we’ve taken strong steps to fight the issues that disproportionately affect people in these communities, there is more work to do, and we’re committed to doing it.”