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Education, Action Needed to Deter Fraud Affecting Black Americans

Grandparent, work-from-home, affinity investing scams most common, AARP report finds

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Black adults were victimized by grandparent scams more than any other kind of con, according to an AARP survey. The pull-at-your-heartstrings ruse involves a bad actor impersonating a grandchild who claims to be in trouble and in need of money immediately. Or the crook purports to be a public defender or jailer familiar with the grandchild's phony plight.

Rounding out the top 5 swindles affecting Black Americans were, in descending order, work-from-home scams, affinity investment scams arising within a church or community group, lottery scams and romance scams.

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More than 1,100 Black adults surveyed

The findings emerged in a national survey that examined fraud victimization, awareness and prevention among three groups: Blacks, Latinos, adults who are white and adults from other racial groups. Some 1,128 Black consumers were among 2,808 people age 18 and older who were surveyed.

On guard against fraud

Based on survey answers, Black adults show more awareness of some scams (listed in descending order) than others, signaling where education and prevention efforts could be best directed.

1. Government impostor
2. Romance
3. Lottery
4. Fake job postings
5. COVID-19 stimulus payments
6. Work from home
7. Utility
8. Mortgage
9. Coronavirus
10. Tax preparation
11. Grandparent
12. Black Lives Matter fake charities
13. Affinity investment scams targeting a church or community group
14. Immigration
15. Business coaching
16. Background check
17. Green scams, such as a bogus home improvement grant for energy efficiency

The survey revealed that about 2 in 5 Black adults had been targeted by a scam and that roughly 1 in 5 lost money to one. Those figures are consistent across racial and ethnic groups.

Other key findings in the AARP report:

  • The Black respondents who were most likely to say they have lost money to a scam were men with at least a college degree and an annual household income of at least $100,000.

  • But when the survey asked about 17 different scams,Black women between ages 40 and 49 with an annual household income of less than $100,000 a year showed the least familiarity with them.

The AARP survey is highlighted in the report “Consumer Fraud in America: The Black Experience."

Education is key

Black adults may be underserved by efforts to educate the public about fraud, according to the AARP report, which notes, “Education is key in helping consumers spot and avoid scams."

The survey found, for example, that 55 percent of Black adults answer phone calls from someone they don't know. Only 39 percent acknowledged practicing smart cybersecurity by always varying the passwords they use to access online accounts. Consumers who use the same password for some or all digital accounts — or who always rely on a variation of the same password — are at greater risk of becoming a fraud victim, the AARP report states.

Experts recommend that you create a unique, complex password for every online account because if, say, crooks steal your Gmail password, then they can't use it to break into accounts such as your online credit card or bank account.

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Silver linings, but there's room for improvement

Among the good news is that 62 percent of Black adults use protective software for computer devices. And just 10 percent said they always provide personal information to enter a contest for a prize or gift.

Across all racial and ethnic lines, the same three schemes topped the list in terms of adults being savvy to them: romance, government impostor and lottery scams.

Black adults expressed the least awareness of scams centered on immigration, business coaching, background checks and “green” scams, such as bogus home improvement grants for energy efficiency.

The survey showed that Black consumers could do more to reduce their susceptibility to fraud by using a robocall blocker for their cellphones and landlines and by listing their phone numbers on the National Do Not Call Registry to decrease unwanted telemarketing calls. Only 39 percent of these respondents have added a landline or mobile number (or both) to the free registry, which is maintained by the Federal Trade Commission.

And a mere 14 percent of Black adults use a password manager, such as LastPass, Keeper, Dashlane or Bitwarden, to store and handle online passwords.

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The survey was conducted from Sept. 14 to Oct. 2, 2020, over landlines, cellphones and online.

Two reports emerged from the survey: one pertaining to Black adults age 18 and older and the other relating to Latinos.

Katherine Skiba covers scams and fraud for AARP. Previously she was a reporter with the Chicago TribuneU.S. News & World Report, and the Milwaukee Journal Sentinel. She was a recipient of Harvard University's Nieman Fellowship and is the author of the book Sister in the Band of Brothers: Embedded with the 101st Airborne in Iraq.

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