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India Currents gave me a voice in days I was very lost. Having my articles selected for publishing was very validating – Shailaja Dixit, Executive Director, Narika, Fremont

Geetika, a divorcee with two small children, felt she had won the lottery when an email popped into her inbox. “You have won $2 million!!” it said.  Geetika barely made ends meet on her salary of $700, so the promise of relief was tempting. 

“Yes!!! Finally! Someone was watching out for me,” she told India Currents.

Geetika called the phone number in the email and was told to first pay taxes and fees for money to be deposited into her account before she received payment. There were no warning voices. All she could visualize was $2 million dollars in winnings. 

“I sold my house and deposited $120,000 into several accounts as directed,”  she said.

But the promised winnings never materialized. Instead, Geetika (60) lost both her home and her money to the scammer. 

The Federal Trade Commission reports that fraud disproportionately impacts people of color, who are already suffering from the worst impacts of the pandemic. In a document published in October 2021, the FTC reiterated its commitment to “a roadmap for action” and is offering recommendations on how to avoid or move forward from fraud.

“We can inoculate people against scams through information. They are far less likely to lose money if people have heard about a scam,” said FTC’s Deputy Director, Monica Vaca at an Ethnic Media Services briefing on October 22nd. She advised victims to report any attempt of fraud they experience or encounter, in order to receive help in recovering their money. 

The FTC is partnering with community legal aid organizations in an initiative to reach lower-income communities with information. They will share data on the types of fraud and other illegal business practices affecting the communities, methods scammers use to defraud consumers and to demand payment, and the amount of money consumers report losing.

The FTC also warned against deceptive practices in the sale of cars, a scheme that nearly trapped Roshn Marwah and his girlfriend. They needed a car so she could get to her job as a nursery school teacher.  Buying a car was essential but expensive for the young couple.

They negotiated the price with a local dealership, but Roshn was taken aback by the financing fees on the paper thrust before him by a genial salesperson.  At 9.5 percent, the fees were exorbitant. 

Roshn left the dealership. A different car dealer helped them get a loan from a reputable bank for at least 3 percent less than the one offered by the previous dealer, reducing their monthly burden by $300. 

Fraudulent auto buying practices like these were reported to FTC. They involved defendants who allegedly discriminated against Black and Latino car buyers, targeted the Latino community with deceptive ads in Spanish and falsified information on the applications and contracts of Navajo people.

Bronx Honda, for example, was accused of violating The Equal Credit Opportunity Act (ECOA) when arranging to finance for customers, by charging the average Black and Latino borrowers about $163 and $211 more in interest, respectively, than similarly situated non-Latino White borrowers.

This makes cars more expensive for some races and ethnic groups and keeps some families from getting a car at all, said John W. Van Alst at the National Consumer Law Center, in a report called Time to Stop Racing Cars: The Role of Race and Ethnicity in Buying and Using a Car. It states that for those at or below the poverty line, 13% of White households lack access to a car, compared

At the briefing, Monica Vaca, Acting Deputy Director, Bureau of Consumer Protection at the FTC, encouraged consumers  to file a complaint with the FTC and talk about these stories.” Reports are critical in giving us a window into the marketplaces people are experiencing, she said. There were cases where the auto dealer changed prices and fees without informing the consumers. They double fees charged for certified pre-owned C cars that were not required.

The FTC recovered 1.5 million funds from Bronx Honda, and $450,000 from Tate’s Auto and refunded the money to defrauded customers.

The Community Advocate Center initiative provides a way for organizations that provide free and low-cost legal services to report fraud and other illegal business practices their clients have experienced, directly to the FTC on behalf of their clients. 

According to the FTC report, “communities of color often have less financial protection because they pay more with cash, debit cards, or money orders. People living in majority Black and Latino communities filed a higher percentage of reports that included paying with debit cards, cash, cryptocurrency, and money orders – payment methods with fewer fraud protections than credit cards that have inbuilt mechanisms of fraud management.”

That includes people like Murali, a flex driver for Amazon. He had no financial protections against Amazon when he decided to become a flex driver for the retail giant. His friends were drivers and he certainly needed the money. 

“It’s simple. You use your own vehicle to deliver packages for Amazon as a way of earning extra money to move you closer to your goals.” 

“The company advertised that they were paying their drivers $18-25 an hour plus 100 percent of the tips,” explained Vaca. Instead, “Amazon diverted the tips received by the drivers to supplement their base pay for two and a half years. After the FTC’s investigation, under a settlement, the company paid $62 million to affected drivers,” she added.

 In 2020, 1.66 million consumers received $106.8 million in redress

Perpetrators of fraud come in many guises. Tech-savvy international crime rings use sophisticated VOIP providers and telemarketing setups with systems to collect money in the US. They target consumers relentlessly. 

Other fraudsters are members of their own community. They offer to help them with taxes, immigration or the government, said Vaca. Scammers seize any opportunity to take advantage of the confusion and heightened emotion surrounding COVID-19.

According to FTC reports, consumers 60 and older report losing money to scams less often than younger adults, but when they do lose money, they report higher individual losses. 

Filing a report of fraud with the FTC will help save losses and recover monies from fraudsters. Murali recovered his lost wages.  Roshn was warned, but Geetika paid for her naïveté. 

In a memo to her employees, Lina Khan, FTC’s new Chair, said,  “American consumers, workers, and honest businesses depend on the Commission to champion a fair and thriving economy for all, and I am confident that we can deliver.” 

Ritu Marwah was a 2020 California reporting and engagement fellow at USC Annenberg’s Center for Health Journalism.

Photo by Visual Stories | Micheile on Unsplash

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Ritu Marwah

Ritu Marwah is an award-winning author ✍️ and a recognized Bay Area leader in the field of 🏛 art and literature. A California reporting and engagement fellow at USC Annenberg’s Center for Health...