Every year countless people are bilked by impersonation scams. Since 2018, the FTC’s Consumer Sentinel Network has received approximately 3 million reports of impersonation scams citing losses of more than $6 billion. Two particularly pernicious forms of the fraud are committed by crooks who pose as government officials or representatives of well-known companies. They use a false aura of authenticity in an effort to steal money or sensitive information from consumers. But consumers aren’t their only targets. Impersonators have businesses in their sights, too, and have been known to misappropriate the names of government agencies or global companies to hide their illegal actions behind a veneer of legitimacy. The FTC has proposed a Trade Regulation Rule on Impersonation of Government and Business and we’d like your feedback.
In December 2021, the FTC announced an Advance Notice of Proposed Rulemaking asking for public comments on a wide range of questions about impersonation scams. Citing data from the Consumer Sentinel Network and the agency’s enforcement experience, the FTC concluded that government and business impersonation scams appear highly prevalent and increasingly harmful – and comments from people who responded to the ANPR bear that out. Some expressed anger and frustration while others told uniquely personal stories. According to one consumer targeted by an impersonator who masqueraded as a legitimate business, “We are lost and devastated. I live in fear daily because someone has sensitive information about my home, its location, and the people I love who reside in it.”
We also received comments that specifically addressed the impact impersonation scams have on businesses. For example, impersonators have come up with B2B-specific forms of fraud that target members of certain industries, often cutting and pasting names and logos to bolster the illusion of legitimacy. It’s all bogus, but by the time the businesses find out, the scammers have vanished with their money. Other crooks claim to be with the IRS, the U.S. Patent and Trademark Office, or another government agency and demand immediate payment for some non-existent fee.
In addition, some commenters focused on the injury to consumers and businesses when spammers and telemarketers impersonate recognizable companies like Amazon, Apple, PayPal, Wells Fargo, etc., and claim to need account information, payment details, or other highly sensitive data. For example, Microsoft noted that consumers often lose hundreds or even thousands of dollars to tech support impersonators who falsely claim to be from Microsoft.
Based on the record to date, the FTC voted to publish a proposed Rule that would give the agency stronger tools to fight back against impersonators and return money to people harmed by their illegal practices. In other words, the Advance Notice of Proposed Rulemaking has moved to the next stage and the FTC has proposed a Trade Regulation Rule on Impersonation of Government and Business. The proposed Rule recently ran in the Federal Register and once again we’re asking for your public comments about what we’ve suggested. The Federal Register Notice explains the simple online process for ensuring that your voice is heard. File your comment by December 16, 2022.