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AG Nessel Urges FTC to Create Robust Rule Outlawing Impersonation Scams
February 28, 2022
LANSING - Michigan Attorney General Dana Nessel, as part of a bipartisan coalition of 48 other attorneys general, is calling on the Federal Trade Commission (FTC) to adopt a national rule to target impersonation scams.
Unfortunately, Michigan consumers have experienced these types of scams. Earlier this month, Nessel reissued her Government Imposter Scams Consumer Alert after Ottawa County residents reported being visited at their homes by individuals claiming to be county employees. Late last year she also warned of utility imposter scams, where bad actors will impersonate utility employees to obtain money or personal information from an unsuspecting customer.
A comment letter from the attorneys general raises concerns about the excess impersonation scams targeting consumers and the current lack of a national rule to outlaw these fraudulent acts and protect residents.
"As attorneys general, we are seeing first-hand the issues these impersonation scams are creating for consumers, small businesses, and charities across the country," Nessel said. "With millions of consumers being targeted each year, it is now more important than ever to adopt a national rule to combat these scams."
As illustrated in the letter, impersonation scams take on many forms:
Impersonation of government entities: Fraudsters claim to be from or affiliated with a government agency to persuade victims of the urgency to provide payment to obtain licensing or certificates in document preparation or regulatory compliance scams.
Business impersonation: These are scams in which fraudsters claim to be working directly for an actual business or as a third party endorsed by the business. Common examples include tech scams in which the imposters claim they are contacting the victim on behalf of companies such as Microsoft or Apple to assist with a ransomware or technology issue.
Person-to-person deceptions: Grandparent scams, romance scams and others use personal information to make a connection with victims. Whether claiming a grandchild is in urgent need of money or creating a fake profile to gain the trust of someone on a social media or dating site, these impersonation scams account for thousands of complaints to attorneys general each year.
Though the methods may vary, impersonation scams cause injury to consumers who lose money, drain resources from regulators tasked with protecting the public, and cause confusion and loss of trust in government agencies and services.
"There is a pressing need for FTC rulemaking to address the scourge of impersonation scams impacting consumers across the United States," the letter states. "A national rule that encompasses and outlaws such commonly experienced scams discussed [in our letter] would assist attorneys general and their partners in reducing consumer harm, maximizing consumer benefits, and holding bad actors to account."
A strong national standard outlawing impersonation scams should:
- Deter bad actors and reduce consumer harm.
- Provide needed clarity on what conduct constitutes impersonation.
- Deprive bad actors of the excuse that they were allegedly not aware their activities were illegal in some jurisdictions as opposed to others.
- Provide more opportunities for the states to collaborate with the FTC on multistate enforcement actions against imposter scammers.
- Allow states to enforce their own standards, free of any preemption by a federal rule.
The FTC should publish additional consumer and business education materials to help prevent consumers from becoming victims of impersonation fraud. These efforts must serve as a complement to a strong regulation with a robust enforcement scheme, not as an alternative.
Joining Attorney General Nessel in submitting this comment letter are the attorneys general of Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Guam, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.