New report: Hardest hit consumers are underreporting fraud problems

Monday, October 22, 2018

The Federal Trade Commission receives fraud and identity theft complaints from millions of consumers each year, yet African American and Latino consumers are reporting fraud at much lower rates than other consumers despite having a much higher rate of victimization.

The FTC’s 2018 study Whose Voice Do We Hear in the Marketplace?: Evidence from Consumer Complaining Behavior, says “heavily black areas are 44% less likely to complain, and heavily Hispanic areas are 36% less likely to complain, relative to their rate of victimization.”

Why are consumers in communities of color complaining at such lower rates?

The report says there’s a “general reluctance and embarrassment to report fraud.” The report’s author attributes much of this to a lack of “social trust,” which includes mistrust of government and a lack of confidence that when African American and Latino consumers report a fraud problem that their complaints will get a response. Some other reasons listed include not knowing where to complain, not knowing they’ve been defrauded and concerns about reporting complaints to the federal government based on immigration status.

The FTC encourages consumers to report fraud complaints to www.ftc.gov/complaint.

The FTC has begun to release more complaint information to the public, including a new Spotlight report focused on recent fraud trends such as scammers demanding payment by gift card.