Have you ever received a call claiming your social security has been compromised or that your car warranty is about to expire? Have you been approached about building your credit or reducing your student debt with a money transfer? If so, you’ve been exposed to potential fraud. Fraudulent schemes and scams are growing and vulnerable populations such as the elderly, veterans, non-English speaking citizens and more specifically Black and Hispanic people are being targeted.
Members of the Federal Trade Commission, the IRS, and the US Attorney’s office gathered to discuss the epidemic of fraud in Wisconsin and across the US at a conference hosted by the Ethnic Media Services at the Washington Park Milwaukee Public Library. “These frauds are financially crushing, you all know that. You all see that they are also emotionally devastating,” said Lois Greisman, FTC Bureau of Consumer Protection.
“Anything we can do to minimize the pain and to prevent [it] is really the core of what we are trying to do.” The conference allowed speakers from the FTC, the Division of Trade and Consumer Protection, DATCP and Legal Action of Wisconsin to speak as a panel where they explained current fraudulent trends they’ve witnessed within the past year. A report of these trends was recorded through the FTCs National Consumer Sentinel Network, an investigative database of complied fraud complaints.
This database also accounts for various reports received by the other agencies, such as the Better Business Bureau and DATCP. According to Todd M. Kossow, regional director for the FTC, last year the database had received more than 1.4 million nationwide fraud reports with reported losses of nearly 1.5 billion dollars. Of that, Wisconsin reported 19,000 fraud reports and a loss of 13 million dollars. A majority of the fraudulent complaints correlated to imposter scams. Imposter scams can be characterized as tech support scams, IRS imposter calls, social security administration calls, the grandparent scam and romance scams. Basically, any scam where somebody pretends to be somebody they are not, in order to get your money. Last year, nearly 85,000 fraud reports of imposter scams came solely from the Milwaukee metropolitan area. But imposter scams aren’t the only way victims can fall prey to fraud.
“These scams that we are discussing today are particularly offensive to me because they pray on the effects of structural racism,” said Milwaukee native Jessica Roulette of Legal Action Wisconsin.
The FTC report also showed that amongst many other vulnerable populations, African Americans and Latino Americans were almost twice as likely to be victims to two specific types of consumer fraud, debt and income related fraud. One specific example being homeownership scams.
Many of the home ownership frauds can be labeled a rent to own properties, lease with an option to purchase or even land contracts. According to Roulette, these scams have major red flags, such as no lawyer involvement, no present real estate agent, no inspection of the home, no appraisal of the home and no use of a standard offer to purchase form. These common home buying necessities can go easily unnoticed for those unknowledgeable of the process.
Victims who inquire on these properties get all the obligations of homeownership without any of the rights. They are bought into a contract believing they will build equity but end up with a property tax burden, an uninsurable and uninhabitable home prone to risks of lead poisoning and much worse.
“For many people homeownership is a dream and the possibility of doing that can leave you particularly vulnerable to exploitation,” said Roulette.
Several community stakeholders were in attendance and gave testimony of fraud in their communities.
For community leaders Parker Rios, Unite Migrant opportunity Service (UMOS), and Zong Sae, Hmong American Friendship Association (HAFA), language barriers and lack of awareness put their communities at risk of fraud.
Both leaders disclosed experiences where community members were targeted and enticed by native speaking scammers. They also acknowledged that the lack of knowledge on the various fraudulent schemes can lead to confusion for those who speak other languages.
“Minority gets hit the most because, one they do not know how to report, two they do not know how to handle it,” said Sae.
So, the looming question is how does one avoid and prevent fraud?
The overwhelming answer is to report it.
Beyond the horror stories of consistent fraud and is repercussions, speakers at the conference encouraged fraud prevention through awareness and action.
According to Kossow, many Latino and African American communities experience higher-rates of fraud but are less likely to report it. This is the same for other victims. Some are undocumented immigrants and fear reporting will result in deportation, while others avoid it due to shear embarrassment.
“Our law enforcement work relies on hearing from and understanding what is going on in your communities, said Kossow. “We need people to tell us what happened to the when they experienced consumer fraud.”
The data collected in the FTC database and received by other agencies helps record fraudulent trends.
These trends then help open investigations on individual or a business-related fraudulent scheme. Once they have the data, the easier it is for each agency to apprehend the predator and return what they can to each victim.
The conference also encouraged on-going financial literacy in schools and local organizations to educate those on how to report and prevent experiencing fraud. If necessary, community groups and organizations are able to report on the behalf of an individual.
For individuals who have experienced fraudulent scam, it is vital to document every interaction as this helps with reported data and return of assets.
To report a fraudulent incident with the FTC, call 1-877-FTC-HELP or visit www.ftc.gov/complaint
To report a fraudulent incident with the DATCP and receive one-on-one mediation call 1-800-422-7128 or visit www.DATCP.WI.Gov
Or visit the www.bbb.org