FTC Proposes Rulemaking to Limit Impersonation Scams

On December 23^th, 2021, the Federal Trade Commission (FTC) issued an advance notice of proposed rulemaking (ANPR) targeting impersonation scams. Impersonation scams generally involve the scammer impersonating a trusted source to convince targets to send money or personal information. These scammers often pretend to be a part of government or well-known businesses.  To add legitimacy, impersonators often use imagery, URLs, and contact information similar to the trusted source.

Although the FTC has historically brought numerous cases involving impersonator scams, as a result of the recent Supreme Court decision in  AMG Cap. Mgmt., LLC v. FTC, 141 S. Ct. 1341, 1352 (2021), the agency’s ability to obtain monetary relief and redress for injured consumers is limited.  The FTC believes that a regulation addressing certain types of unfair or deceptive acts or practices involving impersonation could help reduce this type of fraud and make civil monetary penalties and redress for consumers easier to obtain.  In this ANPR, the FTC is soliciting written comments, data, and arguments concerning the need to undertake a rulemaking to protect consumers and to deter impersonation scams. 

The FTC observes that impersonation scams have grown worse during the COVID-19 pandemic as scammers prey on people confused by the government’s pandemic programs. The FTC reports that consumers were affected by more than 788,000 impersonation scams which lost them $1.6 billion over the first three quarters of 2021. These scammers often target older consumers, communities of color, and small businesses, and pass on the information of those successfully targeted by a previous scam.

In the ANPR, the FTC considers promulgation of a new rule to address all scams impersonating a government official or agency, impersonating a business or its agents, and any entities that may assist the scammers in their impersonations. The FTC is seeking public comments on numerous issues to inform the future rule, including the following: 

• The prevalence of impersonation scams
• The costs and benefits of rules that may address impersonation scams
• Alternative or additional action to address impersonation scams

Comments on the ANPR are due by February 22, 2022 and may be submitted here. 

OFW attorneys will continue to monitor this situation as the Proposed Rule is released. Please reach out if you have any questions.