Black and Latino Consumers Are More Likely to Lose Money to Digital Scams, a Consumer Reports Study Finds
Here’s why, and how to protect yourself
Black and Latino consumers are more than twice as likely as whites to have lost money to a digital scam or cyber attack.
That’s one of the most striking findings of the 2024 Cyber Readiness Report (PDF), the third annual effort by Consumer Reports, Aspen Digital, and the Global Security Alliance to gauge consumer attitudes toward and experiences with digital privacy and security practices.
Rates of being unbanked and underbanked are much higher in Black and Latino households, which as a result often won’t have access to some of the safer payment methods.
Senior attorney at the National Consumer Law Center
In particular, a 2021 FTC report, “Serving Communities of Color” (PDF), notes that members of predominantly Black and Latino communities who reported scams are more likely than those in white communities to have conducted their transactions using cash, cryptocurrency, or money orders, which offer minimal fraud protections, while members of predominantly white communities are more likely to have used credit cards, which offer substantial legal protections.
In addition, those in Black communities were more likely than others to have used payment apps such as Venmo and CashApp or gift cards, while those in Latino communities are more likely than others to have used bank or wire transfers—all of which, again, offer relatively few fraud protections compared with credit cards.
Carla Sanchez-Adams, a senior attorney at the National Consumer Law Center (NCLC), suspects these findings reflect different levels of access to various financial products across these communities. “Rates of being unbanked and underbanked are much higher in Black and Latino households, which, as a result, often won’t have access to some of the safer payment methods,” she says. “Instead, you’re going to use cash, money orders, gift cards—those things that don’t require you to have a bank account.”
Compounding the problem, experts believe, is that Black and Latino consumers are disproportionately targeted by a wide variety of digital scams. An earlier FTC report (PDF) notes that many scammers target recent immigrants “preying on their need to adjust their immigration status,” and that both communities are targeted because of historical economic and financial inequities that make them more vulnerable, for example, to debt-related fraud such as credit repair, debt relief, and advance fee loan schemes.
The disproportionate impact of cyberattacks on Black and Hispanic Americans is deeply concerning, but not surprising given the systemic inequalities these communities face in many aspects of life.
Cybersecurity expert who has worked on the National Security Council and in Congress
Some experts also point to evidence that Blacks and Latinos are less likely to report fraud because they tend not to trust that their fraud complaints will be addressed by government officials.
“The disproportionate impact of cyberattacks on Black and Hispanic Americans is deeply concerning but not surprising given the systemic inequalities these communities face in many aspects of life,” says Nicole Tisdale, a cybersecurity expert who has worked on the National Security Council and in Congress.
Phishing, Impersonation, and Other Common Scams
The 2024 Consumer Cyber Readiness Report also sheds light on the extent to which social media has become a common vector for online fraud. About half of people in the U.S. (48 percent) have received direct messages on social media that seemed to be part of a scam or fraud attempt. And about a quarter (23 percent) of scam attempts that people have experienced originated on social media—more than from any other source except email.
The most common type of scam or attack, at 38 percent, was so-called phishing, where scammers deceive consumers into handing over personal information such as passwords or credit card numbers. Other common types of scams or attacks involved impersonation, where scammers pretend to be the consumer’s bank, a tech support person, or someone they know personally.
Strikingly, 35 percent of people in the U.S. have had one of their online accounts hacked or taken over by a scammer, the report found.
And all told, nearly 1 in 10 people in the U.S. has lost money to a digital scam or cyber attack.
One especially concerning finding of the report is that, despite how common digital scams and cyber attacks are, Americans did not ramp up their efforts to improve their online security between 2023 and 2024. For example, they did not significantly increase their use of strong passwords for home Wi-Fi network and smartphone access, multifactor authentication, unique passwords across different accounts, or password managers.
How to Stay Safe
The report offers a handful of recommendations to help consumers guard against online scams and cyber attacks.
Use better multifactor authentication. This security measure requires users to provide a password and at least one other credential to access an account or application. The second credential is typically a short code that gets sent to the user’s device during the sign-in process and must be entered within a limited amount of time. The report found that 80 percent of people use multifactor authentication. The 2024 report recommends, however, that consumers migrate from text-based versions of multifactor authentication—where the code is sent via text message—to more reliable and safer security key or app-based versions.
Be aware that group chats are often not encrypted. The most commonly used messaging apps, including Facebook Messenger, iMessage, WhatsApp, and Google Messages, do use encryption to keep messages private when you are communicating with one other person. But that is not necessarily true with group chats.
Limit the info your apps collect and share. The report also provides a general alert to consumers that apps often share and sell consumer data—and that this is especially common among free apps, which often generate their revenue by monetizing customer data. Consumers can limit those practices by turning off location services for any apps that don’t need it to work, and by preventing your apps from tracking your online activity.
For step-by-step instructions for doing that, and a more thorough list of digital security tips, check out CR’s free Security Planner tool, which will make customized recommendations after you answer a handful of simple questions. And for tips on recognizing and avoiding scams, see CR’s scam protection guide.
