FTC Can Now Sue Scammers Impersonating Government Agencies, Businesses

The Federal Trade Commission (FTC) said Monday (April 1) that it now has stronger tools to combat scammers who impersonate government agencies and businesses.

A new rule that took effect Monday allows the agency to file federal court cases seeking to recover money for victims of scams and impose civil penalties on fraudsters, the FTC said in a Monday press release.

The rule was finalized in February, at which time the FTC said it targets those who use impersonation fraud that include government seals or business logos, spoofed or lookalike government or business emails and web addresses, or terms that falsely imply government or business affiliations.

The FTC is also accepting public comments on a supplemental notice of proposed rulemaking that would give it additional capabilities to combat scammers who impersonate individuals or provide the means and instruments used in such scams, according to the Monday press release.

This proposed new set of rules targets firms that provide services that they know or have reason to know is being used to harm consumers for impersonation, the agency said when inviting public comment on it in February. For example, this proposed rule would apply to a generative artificial intelligence (AI) platform that creates images, video or text that is used to create deepfakes.

Reported losses to impersonation scams topped $1.1 billion in 2023, three times higher than it was in 2000, the FTC said in a Monday Data Spotlight.

Common scams perpetrated by government and business impersonators include copycat account security alerts; phony subscription renewals; fake giveaways, discounts or money to claim; bogus problems with the law; and made-up package delivery issues.

“All these scams have tactics that scammers hope give them an advantage,” the FTC said in the Data Spotlight. “First, their messages look a lot like the messages real companies send: emails or texts about special deals and security alerts on your accounts. Second, they play on your emotions: if you’re worried about a problem or excited about a free gift, it can be harder to spot signs of a scam. Finally, they reframe their demands for money to avoid setting off alarm bells: people who’d never send money to a stranger have emptied their accounts, believing they were ‘protecting’ their funds.”