The Federal Trade Commission announced that it is seeking comment on a Notice of Proposed Rulemaking in connection with its proposal to implement a rule to combat government and business impersonation scams.
The proposed rule would codify the principle that impersonation scams—and those who provide impersonators with the means to conduct them—violate the FTC Act, and it would allow the Commission to seek civil penalties against such scammers, which is particularly important given the FTC’s limited ability to obtain monetary relief following the Supreme Court’s ruling in AMG Capital.
The FTC reported that impersonators can take many forms, posing as, for example, a lottery official, a government official or a representative from a well-known business or charity. They may also use misleading domain names or “spoofed” contact information to appear legitimate in order fish for information they can use to commit identity theft or seek monetary payments like wire transfers, gift cards and, increasingly, cryptocurrency. Between early 2017 and mid-2022, the FTC received more than 2.5 million reports of these scams from consumers nationwide, who reported losing more than $2 billion.
Among other things, the proposed rule would ban scammers from: (i) using government seals, business logos and other identifying insignia; (ii) spoofing government and business websites and email addresses, including lookalikes that rely on misspellings (e.g., “ntyimes.com,” “rnicrosoft.com,” etc.); and (iii) falsely implying government or business affiliation by making statements like “I’m calling from the Clerk’s Office” or naming a business by implication (e.g., “card member services,” “the car dealership,” etc.). The rule would also apply to those who provide the “means and instrumentalities” of violations, such as suppliers who manufacture fake government credentials.
The FTC’s announcement follows an Advance Notice of Proposed Rulemaking published by the Commission last December, which we blogged about here. The FTC received 164 unique comments in response, which came from members of the public, a bipartisan coalition of 49 state attorneys general and multiple companies and industry organizations.
The notice will be published in the Federal Register soon, and comments must be received within 60 days of publication. After the FTC reviews the comments received, it will decide whether to take the necessary next steps toward issuance of a final rule. “We look forward to comments from the public on our efforts to deter fraud, hold impersonators accountable, and secure redress for consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
“We look forward to comments from the public on our efforts to deter fraud, hold impersonators accountable, and secure redress for consumers” -- Samuel Levine, Director, FTC Bureau of Consumer Protection