Nearly 2.6 million persons complained to the Federal Trade Commission (FTC) last year about scams, said Jennifer Leach, an assistant director of the agency’s Division of Consumer and Business Education.
But this is a small percentage of the number of scam victims, she added.
Why?
“Ninety percent of consumers never complain about being scammed,” explained Steven Baker, director of the FTC’s Midwest Region.
Combating the low level of complaints was a major reason for the FTC’s recent outreach to Chicago area ethnic media at an event sponsored by the Community Media Workshop and New America Media, a nation-wide association of ethnic news outlets.
Some of the reasons why consumers do not complain, officials said, include:
- Fear of being sued.
- Fear that written complaints might expose undocumented immigrants.
- Embarrassment over the experience.
“Don’t be embarrassed, it could happen to anybody. I’m a lawyer and it happened to me,” said Cecilia Abundis, an assistant attorney general with the Illinois Attorney General’s Office.
She explained how money was taken out of her bank account without her knowledge and because she didn’t check her bank account frequently she didn’t know until it was too late.
Sandy Close, New America Media’s executive director, said she was almost a victim of a scam herself.
“I have received phone calls from the IRS alleging to be the IRS, saying we hadn’t paid our taxes. I sweated a whole weekend. Monday my colleagues said the IRS never makes phone calls,” Close said. “Why shouldn’t that be a story, because I didn’t know and I run a news agency.”
Consumers have to be on alert because scammers rely on the latest technology and often switch their scams to seem in sync with the times.
“The scammers are really good, they’re professionals,” said Leach.
The most popular scams, according to officials, involve tech support scams, prize and sweepstakes scams, robocall scams, bank account fraud, IRS imposters, Western Union or moneygram scams, identity theft, online payday loans, scholarship scams, Medicare scams and home repair scams.
Although it was made clear that a scammer doesn’t care if you have a PhD or if you’re high school dropout, some officials still referred to some groups being scammed more than others.
Youths, African-Americans, Latinos and immigrants are among those who have been especially targeted by scammers, the officials noted. Latinos, for example, are often taken advantage of by persons regarding immigration rules or who overcharge for their services, the officials said.
“I think one of the big ones [scams] that targets African-Americans are home repairs and reverse mortgages,” said Leach.
Typically, the scammers offer to carry out home repairs, but unaware consumers wind up taking out new mortgages that can lead to the loss of their homes.
“The consumer is not even aware that they’re signing a mortgage and not a contract and that they can potentially lose their home,” said Leach.
It was noted that African-Americans have a much higher rate of being scammed than whites. About 17 percent of African-Americans have suffered at least one scam as compared to nine percent of whites, according to a FTC study.
But officials were not able to explain the difference, except for saying that low income consumers are more likely to fall victim to a scam.
“I would have liked to hear more documentation that supported that,” said Pamela McMillan, a columnist for CopyLine news magazine.
McMillan said she believes it has a lot to do with the digital divide finally closing and Blacks and Latinos using more technology now than they did several years ago.
“African-Americans rely heavily on their cell phones because a lot of them don’t have computers at home and may not be able to see some of the information that you may have access to on a broader screen because the websites are totally different for mobile than they are for a website,” she said.
The best strategy for consumers, the officials agreed, is to make their complaints known.
“I would encourage people to complain to whatever agency, whether it’s the attorney general’s office, the FTC or the City of Chicago,” said Abundis.
“It’s a very powerful thing for people to come and tell their stories because one of the things telling the stories does is help protect you for the next time,” Leach said. “And it helps protect the people you care about.”