State AGs urge FTC to take action on impersonation scams

State Issues State Attorney General FTC Fraud Consumer Protection Agency Rule-Making & Guidance

On February 23, a coalition of state attorneys general sent a letter to FTC Chair Lina M. Khan, responding to the Commission’s advance notice of proposed rulemaking and urging the FTC to target “impersonation scams” to ensure consumers are protected from harm. As previously covered by InfoBytes, last December the FTC issued a request for comments on a wide range of questions related to government and business impersonation fraud. According to the FTC, reported losses due to impersonation fraud have spiked during the Covid-19 pandemic, with data from the Social Security Administration reporting $2 billion in total losses between October 2020 and September 2021. The AGs commented that overall, they “believe there is a pressing need for FTC rulemaking to address the scourge of impersonation scams impacting consumers across the United States,” noting that “[a] national rule that encompasses and outlaws such commonly experienced scams discussed [within the letter] would assist attorneys general and their partners in reducing consumer harm, maximizing consumer benefits, and holding bad actors to account.” Among other things, the letter discussed state-specific consumer complaints related to business impersonation, document preparation, regulatory compliance, and lead generation scams, and warned that the FTC should explore the means and instrumentalities used in these types of fraud. One example, the AGs pointed out, is impersonators using third-party payment processing services to effectuate their scams, often times requiring certain payment methods for fictitious overdue mortgage, utility, and student loan debts. In stressing the “burgeoning need for a robust standard outlawing impersonation scams,” the AGs stated that “[w]hen a specific type of unfair or deceptive business practice becomes so prevalent, Commission rulemaking is appropriate.” They further added that these efforts are welcomed as part of their ongoing collaborative relationship with the FTC.