Trade Regulation Rule on Impersonation of Government and Businesses

CourtFederal Trade Commission
Citation86 FR 72901
Record Number2021-27731
Publication Date23 December 2021
72901
Federal Register / Vol. 86, No. 244 / Thursday, December 23, 2021 / Proposed Rules
1
Imposter Scams, Fed. Trade Comm’n, https://
www.consumer.ftc.gov/features/feature-0037-
imposter-scams (last visited Nov. 4, 2021).
2
Fed. Trade Comm’n, Fraud Reports:
Subcategories over time: Imposter Scams, Tableau
Public (Nov. 23, 2021), https://public.tableau.com/
app/profile/federal.trade.commission/viz/
FraudReports/SubcategoriesOverTime. While some
of the increase observed in 2021 is attributable to
new data contributors, including the Social Security
Administration, impersonation is a massive and
persistent fraud and has been the top fraud category
reported to the FTC every year since 2017. See Fed.
Trade Comm’n, Fraud Reports: Top Reports,
Tableau Public (Nov. 23, 2021), https://
public.tableau.com/app/profile/
federal.trade.commission/viz/FraudReports/
TopReports. For a list of Sentinel data contributors,
see https://www.ftc.gov/enforcement/consumer-
sentinel-network/data-contributors.
3
See, e.g., AARP, Consumer Fraud in America:
The Black Experience (Aug. 2021), https://
www.aarp.org/content/dam/aarp/research/surveys_
statistics/econ/2021/consumer-fraud-black-
experience.doi.10.26419-2Fres.00456.001.pdf;
AARP, Consumer Fraud in America: The Latino
Experience (Aug. 2021), https://www.aarp.org/
content/dam/aarp/research/surveys_statistics/econ/
2021/consumer-fraud-latino-experience-
report.doi.10.26419-2Fres.00455.001.pdf; Fed.
Trade Comm’n, Serving Communities of Color: A
Staff Report on the Federal Trade Commission’s
Efforts to Address Fraud and Consumer Issues
Affecting Communities of Color (October 2021) at
12–15, 23, 43–44, available at https://www.ftc.gov/
system/files/documents/reports/serving-
communities-color-staff-report-federal-trade-
commissions-efforts-address-fraud-consumer/ftc-
communities-color-report_oct_2021-508-v2.pdf.
4
See, e.g., Compl. at 3–4, FTC v. Ponte Invs., LLC,
No. 1:20–cv–00177–JJM–PAS (D.R.I. filed Apr. 17,
2020) (causing small businesses to believe callers
were affiliated with the Small Business
Administration); Compl. at 6–7, FTC v. Point Break
Media, LLC, No. 0:18–cv–61017–CMA (S.D. Fla.
filed May 7, 2018) (robocalls to small businesses
claiming to be Google); Compl. at 2, FTC v.
DOTAuthority.com, Inc., No. 16–cv–62186 (S.D.
Fla. filed Sept. 13, 2016) (‘‘Many of the consumers
harmed by Defendants’ false representations are
small businesses with only a few employees and
fewer than five trucks.’’); Compl. at 3–4, FTC v. D&S
Mktg. Sols., LLC, No. 8:16–cv–1435 (M.D. Fla. filed
June 6, 2016) (deceiving small businesses into
spending $1.3 million on free government
regulation posters); Compl. at 5, FTC v. Epixtar
Corp., No. 03–CV–8511–DAB (S.D.N.Y. filed Nov. 3,
2003) (defendants sold internet services to small
businesses and falsely represented they were calling
from Verizon or the yellow pages).
5
Fed. Trade Comm’n, Fraud Reports:
Subcategories over time, Tableau Public (Nov. 23,
2021), https://public.tableau.com/app/profile/
federal.trade.commission/viz/FraudReports/
SubcategoriesOverTime. See also Fed. Trade
Comm’n, Consumer Sentinel Network Data Book
2020, 4 (2021), https://www.ftc.gov/system/files/
documents/reports/consumer-sentinel-network-
data-book-2020/csn_annual_data_book_2020.pdf.
6
Fed. Trade Comm’n, Explore Government
Imposter Scams, Tableau Public, https://
public.tableau.com/app/profile/
federal.trade.commission/viz/GovernmentImposter/
Infographic (last visited Nov. 4, 2021). See also
Emma Fletcher, Cryptocurrency buzz drives record
investor scam losses, FTC Data Spotlight (May 17,
2021), https://www.ftc.gov/news-events/blogs/data-
spotlight/2021/05/cryptocurrency-buzz-drives-
record-investment-scam-losses.
7
See, e.g., Compl. at 8–12, FTC v. Forms Direct,
Inc., No. 3:18–cv–06294 (N.D. Cal. Filed Oct. 15,
2018) (government impersonator used domains
including www.usimmigration.us and
Continued
Commerce (Department) published a
proposed rule, ‘‘Securing the
Information and Communications
Technology and Services Supply Chain;
Connected Software Applications,’’
(Connected Software Applications Rule)
to implement provisions of Executive
Order 14034, ‘‘Protecting Americans’
Sensitive Data from Foreign
Adversaries,’’ 86 FR 31423 (June 11,
2021). Commenters have noted that the
original comment deadline of December
27, 2021, may constrain those seeking to
comment on the rule and have asked
that the comment date be extended. The
Department agrees and will extend the
comment period for this proposed rule
to January 11, 2022.
Trisha Anderson,
Deputy Assistant Secretary for Intelligence
and Security, U.S. Department of Commerce.
[FR Doc. 2021–27730 Filed 12–22–21; 8:45 am]
BILLING CODE 3510–20–P
FEDERAL TRADE COMMISSION
16 CFR Part 461
Trade Regulation Rule on
Impersonation of Government and
Businesses
AGENCY
: Federal Trade Commission.
ACTION
: Advance notice of proposed
rulemaking; request for public
comment.
SUMMARY
: The Federal Trade
Commission (‘‘Commission’’) proposes
to commence a rulemaking proceeding
to address certain deceptive or unfair
acts or practices of impersonation. The
Commission is soliciting written
comment, data, and arguments
concerning the need for such a
rulemaking to prevent persons, entities,
and organizations from impersonating
government agencies or staff and
businesses or their agents.
DATES
: Comments must be received on
or before February 22, 2022.
ADDRESSES
: Interested parties may file a
comment online or on paper by
following the instructions in the
Comment Submissions part of the
SUPPLEMENTARY INFORMATION
section
below. Write ‘‘Impersonation ANPR;
FTC File No. R207000’’ on your
comment and file your comment online
at https://www.regulations.gov. If you
prefer to file on paper, mail your
comment to the following address:
Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue
NW, Suite CC–5610 (Annex B),
Washington, DC 20580, or deliver your
comment to the following address:
Federal Trade Commission, Office of the
Secretary, Constitution Center, 400 7th
Street SW, 5th Floor, Suite 5610 (Annex
B), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT
:
Christopher E. Brown (202–326–2825),
cbrown3@ftc.gov.
SUPPLEMENTARY INFORMATION
:
I. General Background Information
The Commission is publishing this
document pursuant to Section 18 of the
Federal Trade Commission (‘‘FTC’’) Act,
15 U.S.C. 57a; the provisions of Part 1,
Subpart B, of the Commission’s Rules of
Practice, 16 CFR 1.7 through 1.20; and
5 U.S.C. 553. This authority permits the
Commission to promulgate, modify, and
repeal trade regulation rules that define
with specificity acts or practices that are
unfair or deceptive in or affecting
commerce within the meaning of
Section 5(a)(1) of the FTC Act, 15 U.S.C.
45(a)(1).
II. Objectives the Commission Seeks To
Achieve and Possible Regulatory
Alternatives
A. Background
Impersonation scams are a leading
source of consumer fraud reported to
the Commission, with the highest total
financial loss for consumers.
Impersonation scams can take many
forms, but they generally involve
scammers pretending to be a trusted
source who convinces their targets to
send money or to disclose personal
information.
1
In the first three quarters
of 2021, more than 788,000
impersonation scams were reported to
the Commission, with a total reported
monetary loss of about $1.6 billion
dollars.
2
These scams often specifically
target older consumers and
communities of color
3
as well as small
businesses.
4
Two prevalent categories of
impersonation scams most frequently
reported by consumers are government
impersonators and business
impersonators.
5
Government and business
impersonators 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.
6
The impersonator 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.
7
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www.uscitizenship.info); Jay Peters, Hackers are
impersonating Zoom, Microsoft Teams, and Google
Meet for phishing scams, The Verge (May 12, 2020),
https://www.theverge.com/2020/5/12/21254921/
hacker-domains-impersonating-zoom-microsoft-
teams-google-meet-phishing-covid-19. Cf. Compl. at
36, FTC v. Associated Cmty. Servs., Inc., No. 2:21–
cv–10174–DML–CI (E.D. Mich. filed Jan. 26, 2021)
(fake charity scammers ‘‘spoofed’’ caller ID to show
names like ‘‘Breast Cancer’’ or ‘‘Volunteer Fire’’ and
local area codes).
8
See, e.g., Stipulated Order at 5–6, FTC v. Sun
Bright Ventures LLC, No. 8:14–cv–02153 (M.D. Fla.
July 22, 2015); AARP, Medicare Card Scams, AARP
Fraud Resource Ctr., https://www.aarp.org/money/
scams-fraud/info-2019/new-medicare-card.html
(last updated Feb. 4, 2021); Harriet Edelson, Social
Security Administration Warns of Increase in
Telephone Scams, AARP (Mar. 5, 2019), https://
www.aarp.org/money/scams-fraud/info-2019/
social-security-scams-psa.html.
9
See, e.g., Compl. at 4, FTC v. PHLG Enters. LLC,
No. 8:17–cv–00220 (M.D. Fla. filed Jan. 27, 2017)
(misrepresenting IRS affiliation); see also AARP,
IRS Imposter Scam, AARP Fraud Resource Ctr.,
https://www.aarp.org/money/scams-fraud/info-
2019/irs.html (last updated Aug. 20, 2021)
(Treasury Department reports 2.5 million IRS
impersonator calls from 2013–2021).
10
See, e.g., Compl. at 7, FTC v. Premier Debt
Acquisitions LLC, No. 1:15–cv–00421 (W.D.N.Y.
filed May 11, 2015) (threatening lawsuits and wage
garnishment and posing as state law enforcement);
Compl. at 2, FTC v. Centro Natural Corp., No. 14–
23879–CIV (S.D. Fla. filed Oct. 20, 2014)
(threatening arrest or referral to law enforcement
and posing as agents of court officials, government
officials, or lawyers); see also Better Bus. Bureau,
2019 BBB Scam Tracker Risk Report 26–27 (2020);
Emma Fletcher, Government imposter scams top
the list of reported frauds, FTC Data Spotlight (July
1, 2019), https://www.ftc.gov/news-events/blogs/
data-spotlight/2019/07/government-imposter-
scams-top-list-reported-frauds.
11
See, e.g., Compl. at 26–28, FTC v. On Point
Global LLC, No. 19–cv–25046 (S.D. Fla. filed Dec.
9, 2019); Am. Compl. at 5–8, FTC v. Starwood
Consulting, LLC, No. 4:18–cv–02368 (S.D. Tex. filed
Mar. 27, 2019); Compl. at 1, Forms Direct, Inc., No.
3:18–cv–06294; Compl. at 3–4, D&S Mktg. Sols., No.
8:16–cv–1435.
12
See, e.g., Compl. at 15, FTC v. Am. Fin. Support
Servs., Inc., No. 8:19–cv–02109 (C.D. Cal. filed Nov.
4, 2019); Stipulated Order at 3, FTC v. Nat’l Awards
Serv. Advisory, LLC, No. 4:10–cv–5418–PJH (N.D.
Cal. Apr. 19, 2012).
13
Fed. Trade Comm’n, Imposter Scams, Fed.
Trade Comm’n Consumer Info., https://
www.consumer.ftc.gov/features/feature-0037-
imposter-scams (last visited Nov. 4, 2021); BBB
Scam Alert: Receive a text with a surprise offer?
Don’t click that link!, Better Bus. Bureau (Sept. 17,
2021), https://www.bbb.org/article/scams/25888-
bbb-scam-alert-receive-a-text-with-a-surprise-offer-
dont-click-that-link.
14
Government Imposter Scams, Tableau Public,
supra note 6. Some figures are rounded to the
nearest thousand for ease of reading.
15
Id.
16
Id.
17
See, e.g., Stipulated Final Order at 4, Ponte
Invs., No. 1:20–cv–00177–JJM–PAS; Admin.
Compl., Traffic Jam Events, LLC, No. 202 3127
(F.T.C. filed Aug. 10, 2020). See also U.S. Cybersec.
& Infrastructure Sec. Agency, avoid scams related
to economic payments, covid–19 (2020), https://
www.cisa.gov/sites/default/files/publications/
Avoid_Scams_Related_to_Economic_Payments_
COVID-19.pdf; Off. of Inspector Gen., Fraud Alert:
COVID–19 Scams, U.S. Dep’t of Health & Human
Servs., https://oig.hhs.gov/fraud/consumer-alerts/
fraud-alert-covid-19-scams/ (last updated Aug. 16,
2021); Coronavirus Scams—Consumer Resources,
Fed. Commc’ns Comm’n, https://www.fcc.gov/
covid-scams (last updated Aug. 26, 2021); Treasury
Inspector Gen. for Tax Admin., IRS-Related
Coronavirus Scam, U.S. Dep’t of Treasury, https://
www.treasury.gov/tigta/coronavirus.shtml (last
visited Nov. 4, 2021).
18
Consumer Sentinel Network (Nov. 22, 2021).
19
Phishing Attacks, CrowdStrike (Mar. 25, 2021),
https://www.crowdstrike.com/cybersecurity-101/
phishing/.
20
Fed. Trade Comm’n, Fraud Reports: Trends
Over Time, Tableau Public (Nov. 22, 2021), https://
public.tableau.com/app/profile/
federal.trade.commission/viz/FraudReports/
TrendsOverTime.
21
Fed. Trade Comm’n, FTC Covid-19 and
Stimulus Reports, Tableau Public, https://
public.tableau.com/app/profile/
federal.trade.commission/viz/COVID-
19andStimulusReports/Map (last updated Oct. 18,
2021).
22
Emma Fletcher, Consumer Protection Data
Spotlight, Amazon Tops List of Impersonated
Businesses, FTC Data Spotlight (Oct. 20, 2021),
https://www.ftc.gov/news-events/blogs/data-
spotlight/2021/10/amazon-tops-list-impersonated-
businesses. But see supra n.2 (uptick in complaints
maybe result of adding new data contributors to the
Consumer Sentinel Network database).
23
See Fletcher, supra note 22.
24
See AMG Cap. Mgmt., LLC v. FTC, 141 S. Ct.
1341, 1352 (2021).
Government impersonators typically
assert an air of authority to stage their
scam, and they use all methods of
communication to reach their targets.
These scammers sometimes threaten a
target with severe consequences such as
a discontinuation of benefits,
8
enforcement of tax liability,
9
and even
arrest or prosecution.
10
Another
observed tactic of government
impersonators is to deceive consumers
into paying for services that would
otherwise be free,
11
or to lure them with
promises of government grants, prizes,
or loan forgiveness.
12
Business
impersonators typically get consumers’
attention with emails, telephone calls,
or text messages about suspicious
activity on consumers’ accounts or
computers or supposed good news
about a refund or prize in hopes of
gaining trust and receiving personal
information.
13
Data reported to the FTC and the
Commission’s law enforcement
experience indicate strongly that
government impersonation scams are
highly prevalent and increasingly
harmful. From January 1, 2017 through
September 30, 2021, consumers
reported 1,362,996 instances of
government impersonation and
associated total losses of roughly
$922,739,109.
14
The most common such
schemes involved Social Security
Administration (SSA) impersonators,
with more than 308,000 complaints
alleging SSA impersonation, followed
by the IRS (124,000) and Health and
Human Services/Medicare programs
(125,000).
15
There were also several
thousand reports of scammers
impersonating government grant-makers
(19,000); FBI, police, or sheriff
personnel (11,500); the FTC (9,500); the
Treasury Department (14,000); and the
U.S. Postal Service (6,500).
16
Scammers have been quick to
capitalize on the COVID–19 pandemic
by exploiting consumers’ concerns
about their health and safety, public
misinformation and confusion
surrounding the crisis, and the
government’s response, which has
fueled various COVID-related
impersonation scams.
17
Business impersonation scams cause a
similarly enormous amount of financial
harm to the public. From January 1,
2017 through September 30, 2021,
consumers reported being defrauded of
roughly $852 million in 753,555
business impersonation incidents.
18
For
business impersonation frauds reported
in the FTC’s Consumer Sentinel
Network, consumers most frequently
identified impersonators of Amazon and
Apple. Other common impersonations
include Publisher’s Clearing House, tech
companies such as Microsoft and
Facebook, retail banks (Bank of
America, Wells Fargo, Citigroup, and
JPMorgan), utilities (Comcast, Verizon,
and AT&T), and consumer goods brands
such as Costco and Walmart.
19
Impersonation fraud in general—
including business, government, friend
and family, romance, and tech support
impersonation—has increased during
the pandemic, with reported total losses
of $2 billion between October 2020 and
September 2021 (up 85% year over
year).
20
Since the pandemic began,
COVID-specific scam reports have
included 12,491 complaints of
government impersonation and 8,794
complaints of business impersonation.
21
The incidence of business
impersonation climbed higher during
the pandemic as commerce shifted
significantly online: There were 273,000
complaints about business
impersonation during the period of July
2020 through June 2021, of which
roughly one third—over 96,000—
identify Amazon.
22
Consumers reported
losing more than $27 million to Amazon
impersonation alone.
23
Although the Commission has
brought many cases involving
impersonator scams under Section 5 of
the FTC ACT, 15 U.S.C. 45, its current
remedial authority is limited. The U.S.
Supreme Court recently held that
equitable monetary relief, including
consumer redress, is not available under
Section 13(b) of the FTC Act.
24
Additionally, consumer redress under
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25
See 15 U.S.C. 45(m)(1)(A); see also COVID–19
Consumer Protection Act of the 2021 Consolidated
Appropriations Act §1401, Pub. L. 116–260, 134
Stat. 1182 (permitting the Commission to seek civil
penalties for violations of Section 5 of the FTC Act
associated with ‘‘the treatment, cure, prevention,
mitigation, or diagnosis of COVID–19’’ or ‘‘a
government benefit related to COVID–19’’).
26
E.g., Compl. at 14, FTC v. Alcazar Networks,
Inc., No. 6:20–cv–2200 (M.D. Fla. filed Dec. 3,
2020); Stipulated Final Order at 4, Ponte Invs., LLC,
No. 1:20–cv–00177–JJM–PAS; Compl. at 9–11, FTC
v. Critical Res. Mediation, LLC, No. 1:20–cv–03932
(N.D. Ga. filed Sept. 22, 2020); Admin. Compl.,
Traffic Jam Events, No. 202 3127; Stipulated Order
at 2, Starwood Consulting, No. 4:18–cv–2368 (Dec.
10, 2019); Compl. at 27–28, On Point Global LLC,
No. 19–cv–25046; Compl. at 15, Am. Fin. Support
Servs., Inc., No. 8:19–cv–02109; Stipulated Order at
3–5, Forms Direct, Inc., No. 3:18–cv–06294 (Dec. 7,
2018); Stipulated Order at 6–7, FTC v. Vantage
Point Servs., LLC, No. 1:15–cv–0006 (W.D.N.Y.
Sept. 17, 2018); Compl. at 7, United States v.
Sunkey Publ’g, Inc., No. 3:18–cv–01444 (N.D. Ala.
filed Sept. 6, 2018); Final J. at 5–6,
DOTAuthority.com, No. 16–62186–civ (Apr. 13,
2018); Compl. at 10, FTC v. 4 Star Resol. LLC, No.
1:15–cv–112S (W.D.N.Y. filed Mar. 20, 2018);
Stipulated Order at 3, D&S Marketing Sols., No.
8:16–cv–1435 (July 10, 2017); Compl. at 4, PHLG
Enters., No. 8:17–cv–00220; J. at 5–6, FTC v. Fed.
Check Processing, Inc., No. 1:14–cv–00122
(W.D.N.Y. Oct. 13, 2016); Permanent Inj. & Order
at 8, FTC v. CD Capital Invs., LLC, No. 8:14–cv–
01033 (C.D. Cal. Aug. 22, 2016); Order at 5, United
States v. Commercial Recovery Sys., Inc., No. 4:15–
cv–36 (E.D. Tex. filed Apr. 18, 2016); Am. Final J.
at 8, FTC v. Lake, No. 8:15–cv–00585–CJC (C.D. Cal.
Mar. 22, 2016); Compl. at 3–5, FTC v. Mun.
Recovery Servs. Corp., No. 3:15–cv–04064 (N.D.
Tex. filed Dec. 24, 2015); Stipulated Final Order at
6–7, Premier Debt Acquisitions, No. 1:15–cv–00421
(Jan. 7, 2016); Compl. at 4, 6, FTC v. Nat’l Payment
Processing LLC, No. 1:15–cv–3811 (N.D. Ga. filed
Oct. 30, 2015); Stipulated Order at 3, FTC v.
Broadway Global Master, Inc., No. 2:12–cv–0855
(E.D. Cal. filed Sept. 10, 2015); Final Order at 4,
FTC v. First Time Credit Sol., Corp., No. 2:15–cv–
01921 (C.D. Cal. July 30, 2015); Final Order at 6,
Sun Bright Ventures LLC, No. 8:14–cv–02153; Final
Order at 2, 5, FTC v. Centro Natural Corp., No.
1:14–cv–23879 (S.D. Fla. July 15, 2015); Default J.
& Final Order at 4–5, 11, FTC v. Williams, Scott &
Assocs., No. 1:14–cv–1599–HLM (N.D. Ga. Apr. 2,
2015); Final Order at 7, FTC v. First Consumers,
LLC, No. 2:14–cv–01608 (E.D. Pa. Feb. 19, 2015);
Stipulated Final Order at 9, FTC v. FMC Counseling
Servs., Inc., No. 0:14–cv–61545 (S.D. Fla. Dec. 15,
2014); Default J. & Order at 3, 7–9, FTC v. AFD
Advisors, LLC, No. 1:13–cv–06420 (N.D. Ill. Aug.
26, 2014); Final Default J. & Order at 4, 10–11, FTC
v. Cuban Exch., Inc., No. 1:12–cv–05890–NGG–
RML (E.D.N.Y. July 30, 2014); Stipulated Final J. &
Order at 11–12, FTC v. Am. Mortg. Consulting Grp.,
No. 8:12–cv–01561 (S.D. Cal. Sept. 18, 2013);
Stipulated Order at 10, FTC v. Freedom Cos. Mktg.,
Inc., No. 1:12–cv–05743 (N.D. Ill. Dec. 21, 2012);
Stipulated Final J. & Order at 5–6, FTC v. Am.
Credit Crunchers, LLC, No. 1:12–cv–01028 (N.D. Ill.
Oct. 10, 2012); Compl. at 13–14, FTC v. Springtech
77376, LLC, No. 4:12–cv–04631–PJH (N.D. Cal. filed
Sept. 5, 2012); Stipulated Final Order at 9–11, FTC
v. Mallett, No. 1:11–cv–01664–CKK (D.D.C. June 14,
2012); Compl. at 11–13, 15, Nat’l Awards Serv.
Advisory, No. 4:10–cv–5418–PJH (filed Apr. 19,
2012); Stipulated Final J. at 4, FTC v. Immigr. Ctr.,
No. 3:11–cv–00055–LRH (D. Nev. Dec. 27, 2011);
Stipulated Final Order at 11, 13, FTC v. Residential
Relief Found., Inc., No. 1:10–cv–3214 (D. Md. Sept.
28, 2011); Compl. at 6–7, FTC v. Loma Int’l. Bus.
Group, Inc., No. 1:11–cv–01483–MJG (D. Md. filed
June 1, 2011). See also Alvaro Puig, Warning: Email
from FTC Chair Lina M. Khan about Coronavirus
money is fake, FTC Consumer Info. (Aug. 19, 2021);
Scott Graham, Why the US PTO is Seeking to
Register Its Own Trademarks, Nat’l L. J. (Aug. 5,
2021), https://www.law.com/nationallawjournal/
2021/08/05/why-the-uspto-is-seeking-to-register-its-
own-trademarks/?slreturn=20210816155611; Better
Bus. Bureau, Government Imposter Scams (July
2020), https://www.bbb.org/globalassets/local-bbbs/
council-113/media/scam-studies/bbb-government-
impostors-study.pdf.
27
E.g., Compl. at 6–9, FTC v. Nat’l Web Design,
LLC, No. 2:20–cv–00846 (D. Utah filed Nov. 30,
2020) (Amazon Affiliates); Compl. at 8, FTC v. One
or More Unknown Parties Deceiving Consumers into
Making Purchases Through www.cleanyos.com, No.
5:20–cv–02494 (N.D. Ohio filed Nov. 4, 2020) (Lysol
and Clorox); Compl. at 8–11, 13, FTC v. Disruption
Theory LLC, No. 3:20–cv–06919VC (N.D. Cal. filed
Oct. 5, 2020) (Global Tel*Link/Securus); Compl. at
10, FTC v. Click4Support, LLC, No. 2:15–cv–05777
(E.D. Pa. filed Oct. 26, 2015) (Apple/Microsoft);
Compl. at 8–9, FTC v. Modern Tech. Inc., No. 13–
cv–8257 (N.D. Ill. filed Nov. 18, 2013) (Yellow
Pages). See also Brooke Crothers, Amazon, Apple,
Microsoft among top brands used by scammers, Fox
News.com (Apr. 17, 2021), https://
www.foxnews.com/tech/amazon-apple-microsoft-
top-brands-scammers; Alvaro Puig, Fake calls from
Apple and Amazon support: What you need to
know, FTC Consumer Info. (Dec. 3, 2020), https://
www.consumer.ftc.gov/blog/2020/12/fake-calls-
apple-and-amazon-support-what-you-need-know;
Microsoft Corp., Protect yourself from tech support
scams, Microsoft Support, https://
support.microsoft.com/en-us/windows/protect-
yourself-from-tech-support-scams-2ebf91bd-f94c-
2a8a-e541-f5c800d18435 (last visited Nov. 4, 2021).
28
See, e.g., Order for Permanent Inj. & Monetary
J., FTC v. Moore, No. 5:18–cv–01960, 2018 WL
4510707, at *1 (C.D. Cal. Sept. 17, 2018) (operator
of fakepaystub.com ‘‘permanently restrained and
enjoined from providing to others the means and
instrumentalities with which to make, expressly or
by implication, any statement or representation of
material fact that misrepresents . . . any person’s
identity’’); Compl. at 3–5 & Ex. H, FTC v. Moore,
No. 5:18–cv–01960 (C.D. Cal. filed Sept. 13, 2018).
29
See Regulation O (Mortgage Assistance Relief
Services), 12 CFR 1015.3(b)(3) (prohibiting
misrepresentations that ‘‘a mortgage assistance
relief service is affiliated with, endorsed or
approved by, or otherwise associated with: (i) The
United States government, (ii) Any governmental
homeowner assistance plan, (iii) Any Federal, State,
or local government agency, unit, or department,
(iv) Any nonprofit housing counselor agency or
program, (v) The maker, holder, or servicer of the
consumer’s dwelling loan, or (vi) Any other
individual, entity, or program’’); Telemarketing
Sales Rule, 16 CFR 310.3(a)(2)(vii) (prohibiting
misrepresentations with respect to a ‘‘seller’s or
telemarketer’s affiliation with, or endorsement or
sponsorship by, any person or government entity’’).
30
See, e.g., Compl. at 2–3, FTC v. First Time
Credit Sol., Corp., No. 2:15–cv–01921–DDP–PJW
(C.D. Cal. filed Mar. 16, 2015) (company used false
affiliation with the FTC to market bogus credit
repair services to Spanish-speaking consumers);
Compl. at 8, FTC v. Gerber Prods. Co., No. 2:14–
cv–06771–SRC–CLW (D.N.J. filed Oct. 30, 2014)
(company misrepresented its baby formula qualified
for or received approval for a health claim from the
U.S. Food and Drug Administration); Compl. at 3–
4, Ponte Invs., LLC, No. 1:20–cv–00177–JJM–PAS
(causing small businesses to believe callers were
affiliated with the Small Business Administration).
Section 19(b), 15 U.S.C. 57b(a) through
(b), is limited and challenging to obtain
without a rule violation. The
Commission believes a rule addressing
certain types of unfair or deceptive acts
or practices involving impersonation,
including affiliation and endorsement,
of government and businesses could
help reduce the level of fraud in this
area and serve as an additional deterrent
for bad actors in the future because such
a trade regulation rule would subject
first-time violators to civil penalties.
25
It
would also enable the Commission to
obtain redress for consumers who lost
money to impersonation scams.
B. Objectives and Regulatory
Alternatives
The Commission requests input on
whether and how it should use its
authority under Section 18 of the FTC
Act, 15 U.S.C. 57a, to address deceptive
or unfair acts or practices involving
impersonation. Specifically, the
Commission proposes addressing the
following practices, which have been
the subject of numerous Commission
investigations and law enforcement
actions: (a) Impersonation of a
government official or agency by a
person or organization without
authority to act on behalf of that
government;
26
(b) impersonation of a
business or its agents by a person or
organization without authority to act on
behalf of that business;
27
and (c) entities
that may provide the means and
instrumentalities for these
impersonators to operate.
28
Both the
Mortgage Assistance Relief Services
(MARS) Rule and the Telemarketing
Sales Rule (TSR) already proscribe
impersonation involving false
government and business (including
nonprofit) affiliation and endorsement
claims.
29
The FTC has filed a number of
law enforcement actions to protect
consumers and small businesses from
these types of impersonation claims
outside of the purview of these rules.
30
An impersonator rule that builds on the
existing sector- and method-specific
rules could more comprehensively
outlaw government and business
impersonation. By focusing on practices
that are the subject of its law
enforcement experience and the subject
of consumer fraud reports, the
Commission anticipates streamlining
this proposed rulemaking for the benefit
of consumers.
The Commission seeks comment on,
among other things, the prevalence of
each of the above practices, the costs
and benefits of a rule that would
address them, and alternative or
additional action to such a rulemaking,
such as the publication of additional
consumer and business education
materials and hosting of public
workshops. In their replies, commenters
should provide any available evidence
and data that support their position,
such as empirical data, consumer-
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perception studies, and consumer
complaints.
C. The Rulemaking Process
The Commission seeks the broadest
participation in the rulemaking. It
encourages all interested parties to
submit written comments. The
Commission also requests input in
analyzing various options and in
drafting a proposed rule. After
reviewing comments submitted in
response to this advance notice of
proposed rulemaking, the Commission
may proceed with further steps outlined
in Section 18 of the FTC Act and Part
1, Subpart B, of the Commission’s Rules
of Practice.
III. Request for Comments
Members of the public are invited to
comment on any issues or concerns they
believe are relevant or appropriate to the
Commission’s consideration of the
proposed rulemaking. The Commission
requests that factual data upon which
the comments are based be submitted
with the comments. In addition to the
issues raised above, the Commission
solicits public comment on the specific
questions identified below. These
questions are designed to assist the
public and should not be construed as
a limitation on the issues on which
public comment may be submitted.
Questions
(1) How widespread is the
impersonation of government entities,
such as agencies of the U.S., state, and
local governments? To what extent are
claims made expressly and to what
extent are they made by implication,
such as claims of endorsement or
affiliation? What types of
communication and technology are used
to facilitate the impersonation of
government entities? What data sources
did you rely on in formulating your
answer(s)?
(2) How widespread is the
impersonation of businesses? To what
extent are claims made expressly and to
what extent are they made by
implication, such as claims of
endorsement or affiliation? What types
of communication and technology are
used to facilitate the impersonation of
businesses? What data sources did you
rely on in formulating your answer(s)?
(3) How widespread is the
impersonation of individuals or entities
other than governments and businesses
in interstate commerce? To what extent
are claims made expressly and to what
extent are they made by implication,
such as claims of endorsement or
affiliation? What types of
communication and technology are used
to facilitate the impersonation of
individuals or entities other than
governments and businesses? What data
sources did you rely on in formulating
your answer(s)?
(4) How should a rule addressing the
practices described in Questions 1
through 3, above, define the term
‘‘impersonation’’? What claims, images,
or symbols are likely to give rise to the
net impression of government or
business impersonation? What evidence
supports your answer(s)?
(5) For the practices described in
Questions 1 through 3, above, are there
individuals or entities that provide the
means and instrumentalities for
impersonators to conduct such
practices? If so, what types of goods or
services do they provide that
significantly enable impersonators to
conduct such practices? What type of
consumer injury does this cause? Under
what circumstances should the
provision of such goods or services be
considered deceptive or unfair? What
evidence supports your answer(s)?
(6) For any practices discussed in
Questions 1 through 3, above, does the
practice cause consumer injury? If so,
what type of consumer injury does it
cause? What evidence demonstrates
such practices cause consumer injury?
Please provide the evidence.
(7) For each of the practices described
in Questions 1 through 3, above, are
there circumstances in which such
practices would not be deceptive or
unfair? If so, what are those
circumstances and could and should the
Commission exclude such
circumstances from the scope of any
rulemaking? Why or why not?
(8) What existing laws and
regulations, other than the FTC Act, if
any, address the practices described in
Questions 1 through 3, above? How do
those laws and regulations affect
consumers? How do those laws and
regulations affect businesses,
particularly small businesses? What
evidence supports your answer(s)?
(9) Is there a need for new regulations
to prevent the practices described in
Questions 1 through 3, above? If yes,
why? If no, why not? What evidence
supports your answer(s)?
(10) How should a rule addressing the
practices described in Questions 1
through 3, above, be crafted to maximize
the benefits to consumers while
minimizing the costs to businesses?
What evidence supports your answer(s)?
(11) Should the Commission consider
publishing additional consumer and
business education materials or hosting
public workshops to reduce consumer
harm associated with the practices
described in Questions 1 through 3,
above? If so, what should such
education materials include, and how
should the Commission communicate
that information to consumers and
businesses?
(12) What alternatives to regulations
should the Commission consider to
address the practices described in
Questions 1 through 3, above? Would
those alternatives obviate the need for
regulation? If so, why? If not, why not?
What evidence supports your answer(s)?
(13) Are there other commercial acts
or practices involving impersonation
that are deceptive or unfair that should
be addressed in the proposed
rulemaking? If so, describe the practices.
How widespread are the practices?
Please answer Questions 4 through 11,
above, with respect to these practices.
IV. Comment Submissions
You can file a comment online or on
paper. For the Commission to consider
your comment, we must receive it on or
before February 22, 2022. Write
‘‘Impersonation ANPR; FTC File No.
R207000’’ on your comment. Your
comment—including your name and
your state—will be placed on the public
record of this proceeding, including, to
the extent practicable, on the website
https://www.regulations.gov.
Because of the public health
emergency in response to the COVID–19
outbreak and the agency’s heightened
security screening, postal mail
addressed to the Commission will be
subject to delay. We strongly encourage
you to submit your comments online
through the https://www.regulations.gov
website. To ensure the Commission
considers your online comment, please
follow the instructions on the web-
based form.
If you file your comment on paper,
write ‘‘Impersonation ANPR; FTC File
No. R207000’’ on your comment and on
the envelope, and mail your comment to
the following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Suite
CC–5610 (Annex B), Washington, DC
20580, or deliver your comment by
courier or overnight service to the
following address: Federal Trade
Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW,
5th Floor, Suite 5610 (Annex B),
Washington, DC 20024.
Because your comment will be placed
on the public record, you are solely
responsible for making sure your
comment does not include any sensitive
or confidential information. Your
comment should not contain sensitive
personal information, such as your or
anyone else’s Social Security number;
date of birth; driver’s license number or
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1
Fed. Trade Comm’n, Fraud Reports: Top
Reports, Tableau Public (Nov. 23, 2021), https://
public.tableau.com/app/profile/
federal.trade.commission/viz/FraudReports/
TopReports; see also, Fed. Trade Comm’n,
Consumer Sentinel Network Data Book 2020, 4–8
(2021), https://www.ftc.gov/system/files/
documents/reports/consumer-sentinel-network-
databook-2020/csn_annual_data_book_2020.pdf.
2
Fed. Trade Comm’n, Fraud Reports: Trends
Over Time, Tableau Public (November 22, 2021),
https://public.tableau.com/app/profile/
federal.trade.commission/viz/FraudReports/
FraudFacts.
3
Fed. Trade Comm’n, Serving Communities of
Color: A Staff Report on the Federal Trade
Commission’s Efforts to Address Fraud and
Consumer Issues Affecting Communities of Color
(Oct. 2021) (noting that impersonator fraud is the
highest complaint category for Latino communities
and the second highest for Black communities).
4
Fed. Trade Comm’n, Protecting Older
Consumers 2020–2021: A Report of the Federal
Trade Commission (Oct. 18, 2021) at 17, https://
www.ftc.gov/system/files/documents/reports/
protecting-older-consumers-2020-2021-report-
federal-trade-commission/protecting-older-
consumers-report-508.pdf.
5
AMG Capital Management, LLC v. FTC, 141
S.Ct. 1341 (Apr. 2021). For government and
impersonation cases that involve violations of
current FTC rules, such as the Telemarketing Sale
Rule, the Commission can still file actions in
federal district court seeking either consumer
redress under Section 19 or civil penalties under
Section 5(m)(1)(A) of the FTC Act. But numerous
types of impersonation schemes are not captured by
these existing FTC rules. For example, numerous
enforcement actions in which the FTC returned
money to victims of impersonation fraud—such as
FTC v. Forms Direct, which returned $2.2 million
to individuals, or FTC v. Corporate Compliance
Services, which returned over $1 million to small
businesses—do not fall under existing FTC rules.
See, e.g., FTC v. Forms Direct, Inc. (American
Immigration Center), No. 3:18–cv–06294 (N.D. Cal.
filed Oct. 16, 2018); FTC v. Corp. Compliance
Servs., Case No. 4:18–cv–02368 (S.D. Tex. Filed July
10, 2018); FTC v. DOTAuthority.com, Inc., No. 16–
cv–62186 (S.D. Fla. filed Sept. 13, 2016); FTC v.
Springtech 77376, LLC, also d/b/a Cedarcide.com,
No. 4:12–cv–04631–PJH (N.D. Cal. filed Sept. 5,
2012); see also, FTC v. Gerber Products Co., No.
2:14–cv–06771–SRC–CLW (D.N.J. filed Oct. 30,
2014) (despite no consumer redress, case illustrates
how businesses can make false claims of affiliation
or endorsement outside of current FTC rules).
6
See 15 U.S.C. 45(m)(1)(A); see also COVID–19
Consumer Protection Act of the 2021 Consolidated
Appropriations Act Section 1401, Public Law 116–
260, 134 Stat. 1182 (permitting the Commission to
seek civil penalties for violations of Section 5 of the
FTC Act that are associated with ‘‘the treatment,
cure, prevention, mitigation, or diagnosis of
COVID–19’’ or ‘‘a government benefit related to
COVID–19’’).
other state identification number or
foreign country equivalent; passport
number; financial account number; or
credit or debit card number. You are
also solely responsible for making sure
your comment does not include any
sensitive health information, such as
medical records or other individually
identifiable health information. In
addition, your comment should not
include any ‘‘[t]rade secret or any
commercial or financial information
which . . . is privileged or
confidential’’—as provided in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and
FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—
including competitively sensitive
information such as costs, sales
statistics, inventories, formulas,
patterns, devices, manufacturing
processes, or customer names.
Comments containing material for
which confidential treatment is
requested must be filed in paper form,
must be clearly labeled ‘‘Confidential,’’
and must comply with FTC Rule 4.9(c),
16 CFR 4.9(c). In particular, the written
request for confidential treatment that
accompanies the comment must include
the factual and legal basis for the
request and must identify the specific
portions of the comment to be withheld
from the public record. See FTC Rule
4.9(c). Your comment will be kept
confidential only if the General Counsel
grants your request in accordance with
the law and the public interest. Once
your comment has been posted publicly
at www.regulations.gov—as legally
required by FTC Rule 4.9(b), 16 CFR
4.9(b)—we cannot redact or remove
your comment, unless you submit a
confidentiality request that meets the
requirements for such treatment under
FTC Rule 4.9(c), and the General
Counsel grants that request.
Visit the FTC website to read this
document and the news release
describing it. The FTC Act and other
laws the Commission administers
permit the collection of public
comments to consider and use in this
proceeding as appropriate. The
Commission will consider all timely
and responsive public comments it
receives on or before February 22, 2022.
For information on the Commission’s
privacy policy, including routine uses
permitted by the Privacy Act, see
https://www.ftc.gov/siteinformation/
privacypolicy.
By direction of the Commission.
April J. Tabor,
Secretary.
Note: The following appendix will not
appear in the Code of Federal Regulations.
Appendix—Statement Issued on
December 16, 2021
Statement of Chair Lina M. Khan Regarding
the Advance Notice of Proposed Rulemaking
on Government & Business Impersonation
Government and business impersonation
schemes cheat American consumers and
small businesses out of billions of dollars
every year. These scammers often pretend to
be working for government institutions—like
the Social Security Administration, the IRS,
or law enforcement—and tell targets that if
they don’t hand over money or submit
sensitive personal information, they could
lose a government benefit, face a tax
liability—or even be arrested. Sometimes
these fraudsters pull off these schemes
instead by pretending to be working for a
well-known brand or company.
Both our enforcement work and consumer
data suggest that government and business
impersonation scams appear highly prevalent
and increasingly harmful. These scams have
been the top category of fraud reports and the
largest source of total reported consumer
financial losses for several year.
1
Impersonation fraud in general has
skyrocketed during the pandemic—with
impersonation fraudsters scamming
Americans out of around $2 billion between
October of last year and September of this
year, an 85% increase year-over-year.
2
Government and business impersonators
have shamelessly capitalized on the health,
safety, and financial worries catalyzed by the
COVID–19 crisis—not only tricking
Americans into handing over their money or
sensitive personal information, but also
impeding access to needed goods, services,
and benefits. While these scams affect
consumers from all walks of life, our data
show that scammers often specifically target
the most vulnerable, including senior
citizens, communities of color, and small
businesses.
3
The FTC routinely prosecutes these scams
and has returned millions of dollars to
defrauded consumers. In the last fiscal year
alone, FTC’s law enforcement work delivered
more than $403 million back to consumers.
4
However, the recent Supreme Court decision
in AMG Capital Management, LLC v. FTC has
significantly curbed our ability to recover
money for the victims of these schemes.
5
To ensure that we can continue to protect
Americans from these fraudsters, our staff
has recommended that we initiate a
rulemaking proceeding to codify a
prohibition on impersonator fraud. I strongly
support the issuance of this Advance Notice
of Proposed Rulemaking. It is critical that our
13(b) authority be restored. It is also
incumbent on the Commission to use the full
range of tools that Congress has given us to
ensure that Americans are protected from
these fraudsters.
A rulemaking in this area could likely have
a market-wide impact and serve as a
deterrent for bad actors, given that a rule here
would subject first-time violators to civil
penalties.
6
It could also enable the
Commission to obtain redress for the people
who lose money to these impersonation
scams. This effort is particularly critical post-
AMG and would represent one of the most
significant anti-fraud initiatives at the agency
in decades.
I urge my colleagues to support this ANPR
and broader efforts to use our full authority
to protect Americans from government and
business impersonation scams. I will look
forward to public comments and engagement
during our rulemaking proceeding to inform
this effort.
[FR Doc. 2021–27731 Filed 12–22–21; 8:45 am]
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