FTC Proposes New Rules to Fight Scammers

Rule would guard against scammers posing as government or business entities

The Federal Trade Commission (FTC) has proposed a new rule that would enable the agency to take action against scammers posing as government or business entities.

The proposed rule would codify the well-understood principle that impersonation scams violate the FTC Act, as do those who provide impersonators with the means to harm consumers. The proposed rule would allow the Commission to recover money from, or seek civil penalties against, scammers who harm consumers in violation of the rule.

“The proposed rule will expand the Commission’s toolkit to combat the significant harm caused by government and business impersonation frauds,” 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.”

The FTC notes that between 2017 and 2022, scammers claimed some $2.5 billion from consumers by claiming to represent legitimate businesses or government entities.

Government and business impersonators can take many forms, posing as, for example, a lottery official, a government official or employee, or a representative from a well-known business or charity. Impersonators may also use implicit representations, such as misleading domain names and URLs and “spoofed” contact information, to create an overall net impression of legitimacy. These scammers are fishing for information they can use to commit identity theft or seek monetary payment, often requesting funds via wire transfer, gift cards, or increasingly cryptocurrency.

The proposed rule would allow the FTC to seek important relief for consumers across a broad array of government and business impersonation cases. This is especially important following the Supreme Court’s ruling in AMG Capital Management LLC v. FTC, which significantly limited the agency’s ability to return to consumers money that was taken in a scam.

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