FTC & The New Impersonator Rule
We continue to follow reports generated by the FTC as they are an agency committed to fighting fraud. This is a topic dear to our hearts. Too many times we have engaged with clients that have personally been targeted one way or another by a scammer. We continue to study security alerts which include data breaches, IT updates and malicious scams. An additional resource that readers may find helpful are the press releases put out by the FTC.
The nation’s consumer protection agency is called the Federal Trade Commission (FTC). The FTC was created in 1914 when President Woodrow Wilson signed the Federal Trade Commission Act into law. The Commission is headed by five Commissioners, nominated by the President and confirmed by the Senate, each serving a seven-year term. No more than three Commissioners can be of the same political party. The President also chooses one Commissioner to act as the Chair. The FTC is committed to targeting scammers that cheat people out of money and in going after businesses that don’t make good on their promises.
We recently came across a release that read: FTC Acts to Stop Student Loan Debt Relief Scheme that Took Millions from Consumers in First Case under the Impersonation Rule. The FTC decided to act on a student loan debt relief scheme, and it was the first case brought under the new Impersonation rule.
This new Impersonation rule went into effect April first giving the FTC stronger tools to combat scammers who impersonate government agencies. Under the new rule, the FTC can now obtain civil penalties against impersonation fraudsters under Section 19(b) of the FTC Act. As we mentioned last month, losses to impersonation scams topped $1.1 billion in 2023. Scammers are impersonating government agencies, and the average consumer simply is not informed.
Briefly, the FTC stopped a student loan debt relief scheme that swindled more than $20 million from consumers that were seeking debt relief. Impersonators were pretending to be affiliated with the Department of Education and were falsely claiming that they would take over consumers’ student loans. A company from California by the name of Panda Benefit Services (also using at least 8 different business names), promised to lower student loan payments, but then took millions of dollars from consumers and did nothing, leaving consumers in deeper debt. Victims were tricked into paying hundreds to thousands of dollars in illegal junk fees towards loan forgiveness that did not exist.
Operators claiming to be affiliated with the Department of Education sent mailers that contained urgent language such as FINAL NOTICE and TIME SENSITIVE material! These mailers boasted benefits like complete loan forgiveness and tax-free loan forgiveness. We generally would not cover debt relief or student loan losses; however, this press release involves fraud, and we are discussing it to highlight the various types of fraud used to defraud consumers.
This new impersonation rule also bans the impersonation of business entities. The rule makes it an unfair or deceptive act or practice to pose as a business or an officer thereof. The FTC added a supplemental notice in February to the impersonation rule that concerns AI. Discussions are taking place as to whether or not AI platforms should be liable if they know that their services are being used to create deceptive content such as deepfake videos. Policymakers in Washington continue to wrestle with AI’s risks. Eighty five percent of Americans have said they are concerned about the spread of misleading video and audio deepfakes. The FTC addresses concerns with AI, but we still do not have a federal law squarely banning deepfakes at the present time.
The FTC is also warning that scammers are engaging more with text messages and email and less by phone calls. Our credit union released an alert this week to be on guard for text messaging attacks. Amazon is warning of impersonation scams concerning Prime membership. Scammers may call, text or email alerting you to an unauthorized charge on your Prime membership or warn about membership expiration. Scammers will ask you to verify your account by providing personal information.
More than a billion unwanted texts are sent per minute. Financial institutions are increasingly warning their clients of the risks of social engineering attacks like smishing which includes fake text messages. If you receive a text message that seems to come from an official organization such as a bank, even if you feel it is legitimate, you should call the bank directly by finding their phone number on their website or on a billing statement. You can also search for a legitimate phone number on the back of your debit or credit card.
The bottom line: We remind our readers that FTC employees will never demand money, make threats, tell you to transfer money or promise to help you get money for a prize winning. In 2023, FTC data shows more than 330,000 reports were filed concerning business impersonation scams and 160,000 reports filed concerning government impersonation scams.
If you are a victim and have suffered a financial loss or have been a victim of identity theft, consider filing a report with your local law enforcement, the Federal trade Commission and the FBI Internet Crime Complaint Center (IC3) at www.IC3.gov and www.identitytheft.gov
You can keep up with the latest FTC press releases by going online to: https://www.ftc.gov/news-events/news/press-releases Finally, any text message that comes from an unknown number that simply says: “Hi, how are you?” We caution against responding as it could be a scam. Scammers are using this tactic as a conversation starter, and you should not text back. Once you engage, you have confirmed for the scammer that they have reached a working telephone number. This could lead to more calls and text messages from other scammers.
Impersonation scammers also use the “Can you hear me?” scam. The goal is to get you to say “yes.” When you do, they have a potential target, and chances are you may respond to future calls from scammers. We appreciate our readers and continue to strive to leave you feeling better equipped to deal with the ongoing threat of impersonation scams.
Two Techs – your locally owned computer support company. Find Two Techs on the web at www.twotechs.com or email us at: support@twotechs.com or call 352-200-2365. USF, MIS, MCP, A+, Network+ & CISSP
(References used FTC, TechRadar, Amazon)