The Dallas Examiner
Buyers beware: Scammers are on the hunt. In 2016, U.S. consumers lost $744 million dollars through fraud, according to recent data compiled by the Federal Trade Commission.
The FTC’s Consumer Fraud Survey also reported that 25.6 million people in this country are fraud victims, which is 10.8 percent of U.S. adults.
The study revealed that the African American community is one of the most vulnerable populations affected by fraud. Moreover, African American and Latino consumers are more likely to be fraud victims than non-Hispanic Whites, according to the survey.
In order to address this issue, the FTC has been working with Congress on finding strategies and solutions to help reduce fraud for consumers by working with law enforcement, participating in consumer outreach and educating the community.
One of the initiatives the FTC participated in to make the public aware of scammers and who they are targeting was an ethnic media telebriefing and teleconference hosted by New American Media and the FTC titled Consumer Fraud, which was held Oct. 12.
Monica Vaca, assistant director of the FTC’s Bureau of Consumer Protection, led the briefing.
The report’s summary indicated that scammers are ingenious and always looking for new ways to cheat people out of money, draining millions of dollars from the community. The telebriefing discussed what the nation’s trending scams are, how to spot a scam and how scammers are targeting certain communities.
Vaca said the study that the FTC has on file is based on what consumers are reporting to the commission.
“In 2016, debt collection was the number one complaint that consumers made to the FTC; that was followed by imposter scams and identity theft,” Vaca said.
Vaca stated that the FTC got close to 3 million reports from around the country in the prior year regarding scams.
“The way we get complaints is by people reporting scams and other complaints by visiting our website, FTC.gov/complaint, or they call us at 1-877-FTC-HELP, or we get letters,” she said. “But a lot of people also report scams through other entities. The Better Business Bureau sends us reports, state attorney general offices send us some, (and) even private entities like MoneyGram.”
Vaca then described how a consumer would go about making a complaint against a scamming entity. She stated the consumer would discuss the subject of the complaint, what happened to them, how much money was lost if they lost any money in the process, the company or person that contacted them and a narrative of what happened.
“These reports are not verified, so what these reports don’t tell us is how particular groups fall for these scams,” Vaca said. “They do tell us a lot about consumer experience in the marketplace.”
Debt collection was the top complaint received to the FTC, followed by imposter scams and identity theft.
“Imposter scams continue to grow, and it is the number one complaint we received from military consumers,” Vaca said. “There are lots of government imposters claiming to be from the IRS. If somebody calls you and says you owe taxes that you never paid and that you may be fined or you may go to prison if you don’t pay it, they might ask for an immediate payment maybe by a wire transfer or maybe by loading up a prepaid card (and) then giving them a number to retrieve the money, but of course the caller is not from the IRS, the imposter is pretending to be calling from the IRS, your caller ID might even say IRS or even show a Washington, D.C., number. The imposter might be saying they are calling from Medicare or he may even send a prize, but first you have to pay taxes to get your money. This is what imposter scams are. This is what they do and this is what they look like.”
Vaca said that 70 percent of people who tell the FTC about fraud says that scammers are reaching them by phone. She also said 58 percent of people lose money in fraud scams through wire transfers.
“Many people haven’t lost money at all, but they want to tell the FTC about suspicious calls that they received,” she said. “They are really helping law enforcement by filing these complaints. We cannot investigate it until people tell us what they are seeing. We use those to investigate and build cases and so do other law agencies. We need witnesses of fraud to rebuild these cases.”
Fraud stories include those that were sent out after the Equifax data breach.
“When the FTC gets complaints, we look at those complaints at the extent we can, we try to build a case against them, and when the FTC settles a case, we make every effort to get money back to consumers who lost money to that scheme,” she said. “Getting real money back to real people – we want to give back as much money as we can to the consumers who were victimized.”
In ethnic communities, Vaca stated that it is important that the media reports fraud stories.
“One of the things we have learned at the FTC is that when people talk about fraud, talk about fraud experiences, talk even about a scamming call that they received, then people are more able to avoid that fraud scam,” Vaca said. “When people don’t talk about it, they get nervous, they get embarrassed, they sound like you’re in trouble. When people don’t talk about what happened to them, when we don’t talk about scammy calls, or potential fraud, that is when people are most likely to lose money.”
Vaca said the FTC recently reached a settlement with Western Union in January 2017 that should bring $586 million dollars back to consumers who were scammed.
Another way scammers are attacking consumers is through unauthorized use of one’s banking account.
“Once someone has access to your bank account numbers, they can initiate a debit without your knowledge,” she said. “Your rights there are really important to exercise quickly. If you experience a debit to you account that you are not aware of, then you need to go to your bank immediately and you need to fill out your affidavit explaining what happened and you need to demand that money get returned to you. You have rights with your bank when you have been a victim of a fraud and those rights are time limited.
“As soon as you learn that you have been a victim of a fraud scam, if that money was taken directly out of your bank account, go to your bank immediately and don’t wait another day because those are very time limited rights to get your money back from your banks.”
Furthermore, older consumers are the best at talking about incidents such as scams, Vaca said.
“They are really good about passing information to their friends and to their relatives, to their children, and really good about sharing their experiences. We actively find that older consumers do a really good job about taking their message on how to be careful on the phone, when people are asking for money.”
In the African American community, the latest data from 2011-2013 show that the areas in which they are more likely to experience fraud are in debt and income.
“We are talking about things like job scams, business opportunity scams and debt related scams like managing credit repair (or) mortgage relief prevalence,” she said. “For example, a scammer may tell you that they can help manage your debt or renegotiate debt for you, but they aren’t really doing anything. People think they have been paying off debt but they really aren’t. They may have been paying fees upfront to the scammer.”
To avoid being scammed, consumers need to take precaution.
“You need to be careful and keep your data secure and be aware of scams targeting people.,” Vaca said.