“We are not a trusted source,” Jennifer Leach, assistant director of the Federal Trade Commission’s Division of Consumer and Business Education, told a gathering of ethnic media representatives in St. Louis on April 20. “We wanted to have this conversation with you to let you know we are here and we have resources.”
The Federal Trade Commission (FTC) contracted with New America Media to coordinate a national tour of such news briefings with ethnic media. At the St. Louis briefing, held at the Better Business Bureau (BBB) downtown, the FTC was joined by officials from the Missouri Attorney General’s Office, the FBI, the St. Louis Metropolitan Police Department and the host BBB.
They all agreed on the most basic starting point to addressing scams and scammers: Victims must speak up. Frequently they do not because they are ashamed that they got tricked into giving away their money.
“There is no shame in being scammed,” Leach said. “Scammers are professionals.”
These professionals are finding a disproportionate amount of targets in the black community. According to the FTC’s 2011 national fraud survey, African Americans were almost twice as likely to be victims of fraud as whites – 17.3 percent of African Americans, as compared to 9 percent of whites. Hispanics reported being fraud victims at a rate of 13.4 percent – more than 4 percentage points higher than whites.
According to Todd M. Kossow, acting director of the FTC’s Midwest Region in Chicago, African Americans are hardest hit by debt collection scams. This is also true of the general public. In 2015, 29 percent of fraud reports (897,655 reports in total) nationwide were related to debt collection.
What do you do if you have been targeted by a scam?
“Talk to somebody,” Leach said. “Tell the FTC. We want to bring these cases. We want to shut them down. One complaint can have a real impact.”
The FTC urges consumers to contact them any time they are pursued for money by someone they don’t know. This includes debt collectors, who may have purchased old debt from another creditor where the statute of limitation has expired and the debt is no longer legally recoverable. Fraudulent court actions can be dismissed through proper investigation.
Report suspected scams to the FTC by calling 877-382-4357. More FTC resources about scammers are available at ftc.gov/PassItOn.
Though officials know that fraud is an under-reported crime, which obviously makes it a crime that is more difficult to investigate and prosecute, there are plenty of reports being made. In 2015, the FTC database received more than 1.2 million fraud complaints, with reported losses of over $765 million.
Missouri is nearly in the top one-third among states hit by fraud. Missouri ranked 17th out of the 50 states in terms of the prevalence of fraud complaints in 2015. The FTC received just over 37,000 fraud complaints from Missouri consumers.
The top fraud reported by Missouri consumers was debt collection by a wide margin; next were imposter scams; frauds relating to telephone and mobile services; prize and sweepstakes scams; and auto-related complaints.
From St. Louis itself, the FTC received nearly 11,000 fraud complaints from consumers, ranking St. Louis 126th out of all large metropolitan areas in the U.S. in reporting fraud.
Missouri leads the nation among states, and St. Louis leads the nation among cities, in prevalence of identity theft complaints, but that may be more an artifact of reporting protocol than a reflection of crime trends. The FTC received 22,164 identity theft complaints from Missouri residents in 2015, with more than 19,000 of those originating in St. Louis, but a St. Louis detective said a state law is driving those numbers up.
“Missouri is the only state that gives local police jurisdiction over identity theft,” said Sergeant Robert Muffler of the St. Louis Metropolitan Police Department. “That’s why you get a lot of official reports here. State law mandates that a local police agency make a police report.”
The FTC has a stand-alone web site for victims of identity theft at Identitythift.gov. Kossow said this site prompts victims to develop a “personal recovery plan” based on the details of the scam that defrauded them. It also helps victims to craft customized letters to send to the IRS and other financial agencies.
The FTC is not the only agency that hears from fraud victims.
“Some call the FTC, some call the Better Business Bureau, some call the attorney general,” said Cheryl Schuetze, assistant attorney general in Missouri. “Some don’t call anybody. Call somebody.”
Schuetze said their office receives about 125,000 fraud complaints per year. “The vast majority of those calls are directed to advocates who try to advocate for the consumer,” she said.
She said their office pursues both civil and criminal charges against scammers, sometimes both at the same time, though it is not easy to reclaim money on these cases. “Unfortunately, most scam artists don’t bank their proceeds,” she said. “It’s not easy to go get that money.”
Schuetze said that government investigators, whether state or federal, are often the best resources for scam victims because frequently the sums involved are not large enough to entice a private attorney to take a case.
“A lot of scams are for very small dollars,” she said. “Though it’s important to the victims, most private attorneys are not going to take a case where they get 30 percent of $300. We’re not on commission, so we’re going to take action.”
The Missouri Attorney General hotline to report fraud is 800-392-8222.
Andrew Ryder, chief of the white-collar crime division of the St. Louis FBI, said criminal investigations of fraud are challenging.
“Frauds are getting much more complex,” Ryder said. “These are not roofing scams after a hail storm. This might be somebody in another hemisphere who stole your identity in three different ways. The cooperation we receive overseas is based on current high-level diplomacy. And we’re often not able to get victims to cooperate because they are scared of the bad guy who is controlling them.”
However, Ryder said, the U.S. Department of Justice, which includes the FBI, wants to hear from crime victims and will try to seek justice for them.
“The U.S. attorney will work these cases aggressively,” he said. “We’ll find a place for these cases.” Call the FBI St. Louis at 314-589-2500.
More Federal Trade Commission resources about scammers and fraud are available at ftc.gov/PassItOn.
Who you gonna call?
There are several agencies that investigate cases of fraud and scams.
Federal Trade Commission * 877-382-4357
Missouri Attorney General * 800-392-8222
FBI St. Louis * 314-589-2500
Better Business Bureau * 314-645-3300
