FTC Reports on Fighting Fraud in Minority Communities


On October 15, 2021, the Federal Trade Commission (FTC) announcement
that he had issued a report
describing the impact of fraud on communities of color (2021 report). The report follows a 2016 Report to Congress (2016 Report) titled “Tackling Fraud in African American and Latin American Communities: The FTC’s Global Strategic Plan. The 2021 report takes stock of the FTC’s efforts since the 2016 report, includes an overview of the types of issues under the FTC’s jurisdiction, and ends with a roadmap for moving forward.

In addition to providing research on communities of color and a plan for the future, the 2021 report focuses on the following three questions:

  • FTC enforcement actions. According to the FTC, “Aggressive law enforcement is a key part of the FTC’s efforts to protect communities of color.” This section of the 2021 report includes details of more than 25 enforcement actions initiated by the FTC over the past five years where illegal conduct has disproportionately targeted or affected communities of color, broken down into the following segments:

Auto buying problems

Student Loan Debt Relief

Marketing prepaid cards

Government imitators

Marketing for inmate services

Misleading and unfounded advertising claims

Jobs and opportunities to earn money

Credit, background checks and access to housing

Payday loans and debt collection

  • Awareness and education initiatives with communities of color
  • FTC workshops and industrial studies



The 2021 report revealed several critical differences in how fraud and other consumer issues affect communities of color. For example, he found that when people reported losing money, those who lived in predominantly black and Latino communities more often reported paying in ways with little or no protections against fraud such as cash, crypto. -currency, money orders and debit cards. Those who live in predominantly white communities, on the other hand, have filed the bulk of their reports on credit card payments, which offer stronger fraud protection.

The research also found notable differences in the types of issues that people living in predominantly black and Latino communities reported to the FTC. There were a higher proportion of reports on problems with car buying, banks and lenders, credit problems and debt collection in these communities than in majority white communities.

Another study in the report, which analyzed information gleaned from several FTC cases, found that in cases involving payday loan applications, student debt relief programs, and specific business opportunities, the number the most affected consumers resided in predominantly black communities.

Looking forward:

According to the 2021 report, the FTC plans to continue addressing the issue through:

  • Law enforcement, including improving reporting and investigation resources to better identify behaviors that target or disproportionately impact communities of color.
  • Outreach and education, making resources more widely available in multiple formats and languages, seeking additional sources of trust in communities of color and expanding the agency’s relationships with ethnic media.
  • Research, increasing systemic review and analysis, targeting trends and disparities, conducting industry studies and continuing to research and understand the problem

InsideARM perspective:

The FTC’s 2021 report appears to fit perfectly with the CFPB’s June 2021 announcement that it plans to look into race issues. In addition to examining historical trends and current data, the FTC and CFPB will improve their processes for obtaining information, enabling them to better dissect and understand current issues surrounding the breed.

ARM industry participants should take note of these reports and the goals of the FTC and CFPB. While there is no law, rule, or regulation in place requiring ARM industry participants to collect data and information relating to disparate impacts, it is certainly worth noting that this issue is on the radar of organizations. regulatory bodies responsible for protecting consumers.


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