The Federal Trade Commission’s (FTC) new rule on government and business impersonation went into effect on April 1. In announcing the new rule, the FTC highlighted new data on the most common ways consumers are targeted by these scams. It noted that combined, reported losses to these impersonation scams topped $1.1 billion for the year, more than three times what consumers reported in 2020.
The new data spotlight revealed the five most commonly reported ways that government and business impersonators convince consumers to turn over their money: 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.
In addition, the spotlight highlighted two key trends since 2020 when it comes to government and business impersonation scams: how consumers are contacted by scammers and how they pay scammers. Reports of text messages and email are trending up as phone calls decline.
When it comes to payment methods, reported losses by bank transfers and cryptocurrency outrank every other payment method used to pay scammers. Bank transfers account for about 40 percent of reported losses to government and business impersonators in 2023, followed by cryptocurrency at 21 percent. Reported losses using both payment methods have increased many times over since 2020.
April 1 marked the effective date of the FTC’s new rule on government and business impersonation, which was finalized last month. The rule gives the agency stronger tools to combat and deter scammers who impersonate government agencies and businesses, enabling the FTC to file federal court cases seeking to get money back to injured consumers and civil penalties against rule violators.
The FTC is also accepting public comments until April 30 on a supplemental notice of proposed rulemaking that would prohibit the impersonation of individuals and prohibit providing scammers with the means and instruments to execute such scams.