U.S. consumers reported losing more than $5.8 billion to fraud in 2021, an increase of more than 70 percent over the previous year, according to the Federal Trade Commission (FTC).
More than 2.8 million consumers filed a fraud report to the FTC in 2021, with the most commonly reported category being imposter scams, totaling $2.3 billion in losses.
Immigrant communities around the United States, specifically those who speak little English, often fall victim to these scams.
At an event at the Open Book gathering space in Minneapolis, people from the FTC, various news organizations, consumer protection agencies and legal service providers discussed the impact of scams on vulnerable communities of Minnesota, particularly the Latino, Asian American, Black and brown and immigrant communities.
Elizabeth Goodell, an attorney at Minnesota Legal Aid, shared a story about her client who got scammed purchasing a used car. A friend of his introduced him to a car dealer who spoke Spanish, which increased his trust and comfort in the transaction. Goodell said after some time, the car began shaking and making grinding noises. Her client felt unsafe driving it, especially with his mom or child, so he called the dealership, drove it there, and they told him they couldn’t fix it.
Despite the dealership saying there was a three-year warranty, when he took it to a shop to be fixed, they said the warranty was close to expiration. He later discovered the car had been in a prior accident, and the dealer had lied.
The insurance payments on the car became unaffordable, at which point he called the dealership and told them they could have the car back, he explained. Soon after, his boss at his job notified him that there was a court order for him, taking 25 percent of his paycheck out to cover it.
“There was a lawsuit against him, and he didn’t really understand. He never even saw the papers,” Goodell said at the event.
Immigrants, particularly people whose first language isn’t English, have a disadvantage in fending off scams because of several reasons, including a sense of trust in “governmental institutions,” the differences in sales tactics in their home country and here and general misunderstandings due to the language barrier.
Elderly people and technology
Older populations often are targeted and fall prey to the scams because there is a discomfort with technology, said Katherine Kelly from the Special Outreach and Protection Unit in the Office of Minnesota Attorney General.
Adaobi Okolue, the publisher for the Twin Cities Daily Planet, shared a story about her father, who is an aging person dealing with the difficulties of technology and scams. Although he is educated, he did not grow up in an age evaluating different sources for credibility was a need in the community.
According to Okolue, many of these scams happen through Whatsapp, often spreading misinformation.
“It’s created a fear inside him so that every time he does get a text message, it could be the most simple thing, he calls me, and describes to me,” Okolue said at the event. “I just feel so bad for him in having to navigate that.”
The dichotomy here is that the same tool that allows her father to stay connected with his homeplace of Nigeria also is the cause of frustration and anxiety due to scams.
Scams among the Hmong community
“Falling for a scam” is taboo among many immigrant communities. For many, a sense of shame lingers far after being scammed, which has a large mental health toll.
Across the Hmong community in the U.S., scams have become a big issue, said May Yer Thao, the president and CEO of the Hmong American Partnership.
The types of scams people experience come at a time when some people are building wealth and then investing that money into financial investment groups that are not legitimate, Thao said.
In April, Kay Yang, a Wisconsin woman, was charged with securities fraud for allegedly defrauding Hmong-American investors in Minnesota, Wisconsin and six other states.
Yang raised nearly $16.5 million from some 70 investors between April 2017 and April 2021, according to a civil complaint filed by the Securities and Exchange Commission in U.S. District Court in Wisconsin. Today, of that money, almost nothing is left.
“Unfortunately, because our community may not be as educated in how do you invest properly or with licensed people, they are the ones who end up being taken advantage of when it comes to these sorts of financial investment scams,” Thao said.
People who are now accumulating wealth have not necessarily been in these positions before, making them more prone to these types of scams.
“They target these people using of elite strategy, stroking people’s egos, and start building relationships that then lead to trust and saying ‘I’ll give you my money to manage, or I’ll give you my money to put into that investment from that you’ve got,'” Thao said.
Lots of these scams are being led by people within the Hmong community, according to Thao. Often the victims don’t want to make a big deal about it because they don’t want to embarrass someone else’s family, Thao said.
“Our communities are small and very tight-knit, so everybody knows everybody,” she said. “You don’t want to put anybody’s family in jeopardy, even though their family member may have been the one at fault.”
Elderly Hmong people have also been the victims of fraud surrounding contract work, for things like roofing and landscaping.
Those who don’t speak, read or write much English are sometimes promised a contracting job, in which the victims pay upfront because they trusted the people from their community. The work never ends up being done, and the individuals responsible for the job disappeared.
“Those are the sorts of scams that our elders continue to face because of limited English and trust. (People) trust that within your own community, you wouldn’t have people taking advantage of you,” Thao said.