Consumer Alert
What do fraud and bad business practices look like in the Latino community?
By
Cristina Miranda
Consumer Education Specialist, FTC
September 18, 2023
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Scammers target everyone. But scams and reported bad business practices can play out differently in different communities. Sometimes, scammers set out to target a particular community. Sometimes, they tell a group to pay in specific ways. (Specific ways that make it very hard to get their money back, after they discover the scam.) There are also businesses who harm communities by using tactics that trick people into use their services. So, what do scams and bad business practices look like in the Latino community?
Reports to the FTC show that majority Latino communities are more likely to file reports about credit bureaus, banks and lenders, debt collection, auto issues, and business opportunities. Those same reports show that majority Latino communities are more likely to say they paid in cash, crypto, debit card, or by bank or wire transfer — all ways with few (if any) consumer protections or ways to get your money back.
In a recent case, the FTC sued a company that promoted bogus business coaching and real estate investment schemes to Spanish-speakers. The company, Ganadores (ironically, “winners” in Spanish), drew people in with Spanish language social media ads promising big earnings selling on Amazon, or by investing in real estate — and charging them big money for supposed “coaching” programs. And that’s just one case.
Since scammers sometimes target the Latino community, let’s target a shared response to those scams and bad business practices. Hispanic Heritage Month is a great time to share resources and tools, and to take action.
- Order and share the FTC’s series of fotonovelas, graphic novels that educate through storytelling. They’re free, along with lots more at ftc.gov/ordenar.
- Subscribe and share Consumer Alerts in English or Spanish. They’ll keep you up to date on the latest scams.
- Learn and share some consumer protection basics at consumidor.gov and consumer.gov.
Spread the word at community events, gathering places, or just among friends and family. And tell people in your community that, if they spot a scam or bad business practice, tell the FTC: ReportFraud.ftc.gov (in English) or ReporteFraude.ftc.gov (in Spanish.) Every report makes a difference.
Topics
Scams
Scams Against Small Businesses
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Business Blog
Companies warned about consequences of loose use of consumers’ confidential data
By
Lesley Fair
September 18, 2023
Who’s privy to some of a person’s most sensitive information? A healthcare provider? A member of the clergy? Their Mom? There’s someone else to add to that list: the company that prepares their taxes. The FTC is using its Penalty Offense Authority to put five tax preparation companies on notice that they could face civil penalties if they misuse consumers’ confidential data. Not in the tax prep business? Not so fast. The Notice of Penalty Offenses Concerning Misuse of Information Collected in Confidential Contexts restates long-standing legal principles every business should keep in mind.
Under the Penalty Offense Authority in Section 5(m)(1)(B) of the FTC Act, the FTC can seek civil penalties – currently up to $50,120 per violation – if there is a written Commission decision establishing that certain conduct is deceptive or unfair, a company is on notice of that fact, and the company nonetheless engages in that prohibited practice.
The Notice sent to the tax preparation companies cites the litigated FTC decision against Beneficial Corporation as legal authority. You’ll want to read the Notice for details, but here are some practices specifically cited as illegal:
- “It is an unfair or deceptive trade practice to use information collected in a context where an individual reasonably expects that such information will remain confidential (‘Confidential Context’) for any purpose not explicitly requested by the individual unless the individual first provides affirmative express consent for such use.”
- “It is an unfair or deceptive trade practice to make false, misleading, or deceptive representations or omissions concerning the use or confidentiality of information collected in a Confidential Context.”
Boiling it down to the basics, the Notice warns the tax prep companies that unless they first get the person’s affirmative express content, it may be deceptive or unfair under the FTC Act for them to put consumers’ information to use in other contexts – for example, for the company’s own separate financial benefit, for advertising purposes, or for the promotion or sale of other products. And although there may be situations where obtaining consent is not sufficient to protect consumers’ privacy, the Notice makes clear that, at a minimum, you must get consumers’ consent before using confidential information for unexpected purposes.
One significant detail businesses should heed: this warning applies to improper uses and disclosures of confidential information in offline and online environments. With respect to online marketing, the FTC’s accompanying letter specifically cautions businesses against employing tracking technologies such as pixels to use or disclose consumers’ confidential information for advertising and marketing purposes. Specifically, the letter to the tax prep companies mentions this post from the FTC’s Office of Technology and adds this important point:
[T]he Commission considers it an unfair or deceptive act or practice to use tracking technologies such as pixels, cookies, APIs, or SDKs to amass, analyze, infer, and transfer information collected in a Confidential Context for the purposes described in the prior paragraph without first obtaining affirmative express consent. It is also an unfair or deceptive practice to misrepresent or omit material facts regarding the use or confidentiality of information collected in a Confidential Context through tracking technologies such as pixels, cookies, or SDKs.
Pixels are nearly ubiquitous in the online world, so businesses should review their tracking technologies to ensure their use is above board.
The Notice of Penalty Offenses was sent to just those five tax prep companies, but the accompanying letter includes insights from recent settlements in BetterHelp, GoodRx, and Epic Games that every business should bear in mind when considering what constitutes “affirmative express consent.” Spoiler alert: burying something in your Privacy Policy or Terms of Service doesn’t meet the “clear and conspicuous” standard.
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Consumer Alert
After Atlantic storm Lee, send scammers packing
By
Gema de las Heras
Consumer Education Specialist, FTC
September 19, 2023
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Atlantic storm Lee brought near-hurricane strength winds and torrential rains to many New England residents — many already affected by wildfires and severe flooding this summer. When you’re doing your best to recover from the destruction caused by back-to-back natural disasters, the words “I can help” may sound like music to your ears. And that’s exactly what scammers count on to try to steal your money or personal information. So how do you weed out the scammers and get real help?
Scammers might knock on your door and offer help to remove a fallen tree, clean up services for water damage, or help to apply for government assistance. But even if the details change, there are steps to protect yourself from the most common disaster recovery scams.
- Spot unlicensed contractors and scammers promising immediate clean-up or repairs. They’re often the ones who quote outrageous prices, demand payment up front, or lack the skills needed. If they won’t give you copies of their license, insurance, and a contract in writing, don’t hire them.
- Guard your personal information. Only scammers will say they’re a government official and then demand money or your credit card, bank account, or Social Security number.
- Spot FEMA impersonators. If someone wants money to help you qualify for FEMA funds, it’s a scam. Download the FEMA Mobile App to get more information and alerts.
- Never pay by wire transfer, gift card, payment app, or with cryptocurrencyor cash. Scammers want to get your money in a hurry, and in ways it’s harder for you to get it back.And never make the final payment until the work is done and you’re satisfied.
Visit ftc.gov/WeatherEmergencies to learn more and share to help others avoid disaster recovery scams. Suspect a scam? Tell the FTC at ReportFraud.ftc.gov.
Scams
