Unmasking Identity Fraud: How It Affects Your Business

Every year countless people are scammed by identity fraud. Since 2018, the FTC’s Consumer Sentinel Network has received approximately 3 million reports of identity theft scams that have reported losses of more than $6 billion. Two particularly vicious forms of fraud are perpetrated by crooks posing as government officials or representatives of well-known companies. They use a false aura of authenticity to steal money or confidential information from consumers. But consumers aren’t their only targets. Impersonators also target companies, and have done so Known for misusing the names of government agencies or global corporations to hide their illegal actions behind a cloak of legitimacy. The FTC has proposed a trade regulation rule on government and corporate impersonation and we want your feedback.

In December 2021, the FTC announced advance notice of the proposed rulemaking Solicit public comments on a variety of identity fraud issues. Citing data from the Consumer Sentinel Network and agency‘s Based on enforcement experiences, the FTC has concluded that government and business identity fraud appears to be widespread and increasingly harmful – and comments from those who have responded to the ANPR confirm this. Some expressed anger and frustration, while others shared unique personal stories. According to a consumer targeted by an impersonator posing as a legitimate company, “We are lost and devastated. I live in fear every day because someone has confidential information about my home, its location and the people I love who live in it.”

We’ve also received comments specifically addressing the impact of identity fraud on businesses. For example, impersonators have developed B2B-specific scams that target members of specific industries, often cutting and pasting names and logos to reinforce the illusion of legitimacy. It’s all bogus, but by the time the companies find out, the scammers are gone with their money. Other crooks claim to be with the IRS, US Patent and Trademark Office, or some other government agency and demand immediate payment of a non-existent fee.

Additionally, some commenters focused on the harm to consumers and businesses when spammers and telemarketers pose as recognizable companies such as Amazon, Apple, PayPal, Wells Fargo, etc. and claim to require account information, payment details, or other highly sensitive data. For example, Microsoft found that consumers often lose hundreds or even thousands of dollars to tech support impersonators falsely claiming to be Microsoft.

Based on its records to date, the FTC voted to release a proposed rule that would give the agency stronger tools to stand up against impersonators and repay money to people harmed by their illegal practices. In other words, advance notice of proposed rulemaking has moved to the next phase, and the FTC has done so proposed a trade regulation rule on government and corporate impersonation. The proposed rule has recently been entered into the Federal Register and we again invite your public comments on our proposals. The Federal Register Notice explains the simple online process to ensure your voice is heard. Submit your comment by December 16, 2022.

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