Following its 2016 report “Combating Fraud in African American & Latino Communities: The FTC’s Comprehensive Strategic Plan,” which detailed the agency’s strategy to reduce fraud in Black and Latino communities, the FTC has just issued a new staff report, “Serving Communities of Color.” This new report outlines the egregious and disproportionate impact on fraud of communities of color, especially during the COVID pandemic, notwithstanding the “extensive strides” the FTC has made in addressing fraud impacting communities of color. The report notes that the “scams and other harmful practices perpetrated on communities of color can have an outsized impact on people who are already suffering some of the worst effects of a global crisis.”
As outlined in the new report, the FTC has brought more than 25 actions since 2016 where the agency could identify that the conduct either specifically targeted or disproportionately impacted communities of color, including cases involving auto-buying, for-profit colleges, government impersonators, job and income opportunities, and debt relief. (We have blogged about some of these cases: see here, here and here.)
The report also outlines the FTC's non-enforcement activities, such as education, advocacy, outreach and research. The research conducted by the FTC revealed some important differences between communities of color and majority White communities, and the impact on the levels and types of fraud based on those differences. For example, the FTC found that “people living in majority Black and Latino communities filed a higher percentage of reports that included paying with debit cards, cash, crypto currency, and money orders – payment methods with fewer fraud protections – than majority White communities. In contrast, people living in majority Black and Latino communities filed a lower percentage of reports involving payment by credit card – a payment method with more fraud protection – than majority White communities.” The FTC’s research also included an analysis of online user interface design features that can manipulate consumers into taking unintended or undesired actions, culminating in the FTC’s Dark Patterns Workshop which highlighted the disparate impact of these features on communities of color.
The FTC’s detailed report about its work ends with a “Looking Forward” section, outlining the steps the FTC is committing to taking: i.e., “serving communities of color through vigorous law enforcement actions, meaningful community engagement and dialogue, and the pursuit of insightful research.” Specifically, the report states that, in addition to conducting more research and outreach, the FTC plans to enhance investigative resources to better identify conduct that either directly targets, or disproportionately impacts, communities of color and shut it down through law enforcement actions. In addition, it intends to “explore how the FTC may use its unfairness authority to target discriminatory and other problematic practices, such as algorithmic bias or discriminatory impacts related to facial recognition and other surveillance technology.”
There will undoubtedly be much to watch for in the coming months and years as the FTC prioritizes this important work.
“Despite the agency’s efforts, there is much work left to do. The FTC will continue to prioritize this work and dedicate the resources necessary in this area…”