[Federal Register Volume 87, Number 199 (Monday, October 17, 2022)]
[Proposed Rules]
[Pages 62741-62751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21289]


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FEDERAL TRADE COMMISSION

16 CFR Part 461


Trade Regulation Rule on Impersonation of Government and 
Businesses

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking; request for public comment.

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SUMMARY: The Federal Trade Commission (``FTC or ``Commission'') 
commences a rulemaking to promulgate a trade regulation rule entitled 
``Rule on Impersonation of Government and Businesses,'' which would 
prohibit the impersonation of government, businesses, or their 
officials. The Commission finds such impersonation to be prevalent 
based on the comments it received in response to an advance notice of 
proposed rulemaking and other information discussed in this document. 
The Commission now solicits written comment, data, and arguments 
concerning the utility and scope of the proposed trade regulation rule 
to prohibit the impersonation of government, businesses, or their 
officials.

DATES: Comments must be received on or before December 16, 2022.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Comment Submissions part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Impersonation NPRM, 
R207000'' on your comment and file your comment online at https://www.regulations.gov. If you prefer to file your comment on paper, mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW, 5th Floor, Suite 5610 (Annex B), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Christopher E. Brown, Attorney, 
Marketing Practices Division, phone: 202-326-2825, [email protected].

SUPPLEMENTARY INFORMATION: The Commission invites interested parties to 
submit data, views, and arguments on the proposed Rule on Impersonation 
of Government and Businesses and, specifically, on the questions set 
forth in Item IV of this notice of proposed rulemaking (``NPRM''). The 
comment period will remain open until December 16, 2022.\1\ To the 
extent practicable, all comments will be available on the public record 
and posted at the docket for this rulemaking on https://www.regulations.gov. If interested parties request to present their 
position orally, the Commission will hold an informal hearing, as 
specified in Section 18(c) of the FTC Act, 15 U.S.C. 57a(c). Persons 
interested in making a presentation at an informal hearing must file a 
comment in response to this document containing a statement explaining 
why they believe an informal hearing is warranted, how they would 
participate in an informal hearing, their interests in the proceeding, 
whether there are any disputed issues of material fact necessary to be 
resolved during an informal hearing, and a summary of their anticipated 
testimony. If an informal hearing is held, a separate document will 
issue under 16 CFR 1.12(a) (``initial notice of informal hearing'').
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    \1\ The Commission elects not to provide a separate, second 
comment period for rebuttal comments. See 16 CFR 1.11(e) (``The 
Commission may in its discretion provide for a separate rebuttal 
period following the comment period.'').
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I. Background

    On December 23, 2021, the Commission published an advance notice of 
proposed rulemaking (``ANPR'') under the authority of Section 18 of the 
FTC Act, 15 U.S.C. 57a(b)(2); the provisions of part 1, subpart B, of 
the Commission's Rules of Practice, 16 CFR 1.7-1.20; and 5 U.S.C. 
553.\2\ This authority permits the Commission to promulgate, modify, or 
repeal trade regulation rules that define with specificity acts or 
practices that are unfair or deceptive in or affecting commerce within 
the meaning of Section 5(a)(1) of the FTC Act, 15 U.S.C. 45(a)(1). The 
ANPR described the Commission's history of taking law enforcement 
action against and educating consumers about the impersonation of 
government and businesses,\3\ and it asked questions about the 
prevalence of impersonation fraud and whether and how to proceed with 
an NPRM.\4\ The Commission took comment for 60 days, and it received 
164 unique comments, which it has thoroughly considered.
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    \2\ Fed. Trade Comm'n, ANPR: Trade Regulation Rule on 
Impersonation of Gov't and Businesses, 86 FR 72901 (Dec. 23, 2021), 
https://www.federalregister.gov/documents/2021/12/23/2021-27731/trade-regulation-rule-on-impersonation-of-government-and-businesses.
    \3\ See id., 86 FR 72901-04.
    \4\ See id. at 72904.
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    Based on the substance of these comments, as well as the 
Commission's history of enforcement and other information discussed 
below, the Commission has reason to believe that the impersonation, 
including affiliation or endorsement claims, of government, businesses, 
and their officials or agents is prevalent \5\ and that proceeding with 
this rulemaking is in the public interest. This document discusses the 
comments and explains its considerations in developing the proposed 
rule. The Commission also poses specific questions for comment. 
Finally, the NPRM provides the text of its proposed rule.
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    \5\ See 15 U.S.C. 57a(b)(3) (``The Commission shall issue a 
notice of proposed rulemaking pursuant to paragraph (1)(A) only 
where it has reason to believe that the unfair or deceptive acts or 
practices which are the subject of the proposed rulemaking are 
prevalent.'').
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II. Summary of Comments to ANPR

    The Commission received 164 unique comments in response to the 
ANPR, which are publicly available on this rulemaking's docket at 
https://www.regulations.gov/docket/FTC-2021-0077/comments.\6\ Of the 
total comments received, 113 expressly support the Commission's 
proceeding with the rulemaking. Another 35 comments did not express a 
clear view on the merits of proceeding, and another 16 comments did not 
address the question. No commenter expressed the view that the 
Commission should not commence this rulemaking. Most comments came from 
individual consumers, with 140 total comments. Ten comments were 
submitted by businesses,\7\ eleven by

[[Page 62742]]

trade associations,\8\ and three by government or law-enforcement 
organizations.\9\
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    \6\ The docket lists 168 comments, but four of these were 
submitted by AVIXA, Inc. (``Audio Visual and Integrated Experience 
Association'') and two by the National Association of Attorneys 
General (``NAAG''), accounting for four total duplicates. See AVIXA 
Cmts., https://www.regulations.gov/comment/FTC-2021-0077-0089, 
https://www.regulations.gov/comment/FTC-2021-0077-0085, https://www.regulations.gov/comment/FTC-2021-0077-0126, https://www.regulations.gov/comment/FTC-2021-0077-0128; NAAG Cmts., https://www.regulations.gov/comment/FTC-2021-0077-0152, https://www.regulations.gov/comment/FTC-2021-0077-0164.
    \7\ See Pub'rs Clearing House, Cmt. on ANPR (Feb. 8, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0008 (``PCH 
Cmt.''); YouMail Inc., Cmt. on ANPR (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0148 (``YouMail Cmt.''); 
WMC Global, Cmt. on ANPR (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0154 (``WMC Cmt.''); 
DIRECTV, LLC, Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0167 (``DIRECTV Cmt.''); 
Somos, Inc., Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0162 (``Somos Cmt.''); 
Microsoft Corp., Cmt. on ANPR (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0135 (``Microsoft Cmt.''); 
Apple, Inc., Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0159 (``Apple Cmt.''); 
Cotney Attorneys & Consultants, Cmt. on ANPR (Feb. 22, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0140 (``Cotney 
Cmt.''); Erik M. Pelton & Associations, Consultants, Cmt. on ANPR 
(Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0156 (``Pelton Cmt.''); Informa PLC, Cmt. on ANPR (Feb. 22, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0166 (``Informa 
Cmt.'').
    \8\ See Exhibitions & Conferences Alliances, Cmt. on ANPR (Feb. 
15, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0009 
(``ECA Cmt.''); AVIXA, Inc., Cmt. on ANPR (Feb. 17, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0085 (``AVIXA Cmt.''); 
Experiential Designers & Producers Association, Cmt. on ANPR (Feb. 
16, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0073 
(``EDPA Cmt.''); Association of Equipment Manufacturers, Cmt. on 
ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0168 (``AEM Cmt.''); The American Apparel & Footwear 
Association, Cmt. on ANPR (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0141 (``AAFA Cmt.''); 
NCTA--The internet & Television Association, Cmt. on ANPR (Feb. 23, 
2022), https://www.regulations.gov/comment/FTC-2021-0077-0169 
(``NCTA Cmt.''); USTelecom, Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0160 (``USTelecom Cmt.''); 
International Housewares Association, Cmt. on ANPR (Feb. 22, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0144 (``IHA 
Cmt.''); National Association of Broadcasters, Cmt. on ANPR (Feb. 
22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0146 
(``NAB Cmt.''); CTIA, Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0161 (``CTIA Cmt.''); 
Consumer Tech. Ass'n, Cmt. on ANPR (Feb. 17, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0091 (``CTA Cmt.'').
    \9\ See Broward Cnty., Fla., Cmt. on ANPR (Feb. 16, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0075 (``Broward 
Cmt.''); NAAG, Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0164 (``NAAG Cmt.''); 
Nat'l Ass'n of State Charity Officials (``NASCO''), Cmt. on ANPR, at 
1 (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0165 (``NASCO Cmt.'').
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    The 140 individual consumers who commented expressed deep concern 
about the harmful effects of both government and business 
impersonation. One representative consumer comment declared: ``Citizens 
of the USA should be able to answer the phone and not have to worry 
about what type of spam, coercion, or trickery is about to assault 
them.'' \10\ Many consumers expressed concern that impersonation scams 
target specific populations, such as older consumers. Another consumer, 
who fell victim to an impersonator of a contractor company, described 
lasting and serious harm: ``We are lost and devastated. I live in fear 
daily because someone has sensitive information about my home, its 
location, and the people I love who reside in it.'' \11\
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    \10\ Coni Limpert, Cmt. on Trade Regulation Rule on 
Impersonation of Government and Businesses (``Cmt. on ANPR'') (Feb. 
22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0121 
(``Limpert Cmt.'').
    \11\ Yroctonya Williams, Cmt. on ANPR (Jan. 6, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0004 (``Williams Cmt.'').
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A. Comments About the Impersonation of Government

    In its ANPR, the Commission cited public data from the Consumer 
Sentinel Network database and its enforcement record to conclude that 
``government impersonation scams are highly prevalent and increasingly 
harmful.'' \12\ The comments received about the impersonation of 
government bolster this conclusion.
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    \12\ ANPR, 86 FR 72901; see also Fed. Trade Comm'n, Explore 
Government Imposter Scams, TABLEAU PUBLIC, https://public.tableau.com/app/profile/federal.trade.commission/viz/GovernmentImposter/Infographic (last visited Mar. 17, 2022).
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    Six commenters explicitly addressed the widespread nature of the 
impersonation of government entities, citing common scams perpetrated 
by fraudsters pretending to be Federal, State, and local 
governments.\13\ For example, USTelecom, a trade association of 
telephone and broadband industry companies, and YouMail, Inc. 
(``YouMail''), a communications and cybersecurity company, cite their 
own data regarding the prevalence of Social Security Administration 
impersonation scams,\14\ which echo the Commission's findings that 
these schemes are among the most common government impersonation 
complaints. Broward County, Florida, and NAAG note the incidence of 
government impersonation at the local level, giving particular emphasis 
to scams offering consumers official-looking government documents at a 
significantly marked-up price.\15\ Commenters also cite evidence of 
other common government impersonation frauds, such as schemes 
impersonating the Internal Revenue Service \16\ and Department of 
Homeland Security \17\ or targeting public-sector employees entitled to 
benefits \18\ and businesses seeking to comply with regulatory 
reporting requirements.\19\
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    \13\ See USTelecom, Cmt. at 2; Broward Cmt. at 1; NAAG Cmt. at 
3; YouMail Cmt. at 3WMC Cmt. at 2; Somos Cmt.
    \14\ See USTelecom Cmt. at 1; YouMail Cmt. at. 3.
    \15\ See Broward Cmt. at 1; NAAG Cmt. at 4.
    \16\ See Broward Cmt. at 1.
    \17\ See USTelecom Cmt. at 1.
    \18\ See NAAG Cmt. at 5-6.
    \19\ See id. at 5; see also Fed. Trade Comm'n, NPRM: 
Telemarketing Sales Rule, 87 FR 33677, 33683 n.77 (June 3, 2022), 
https://www.federalregister.gov/documents/2022/06/03/2022-09914/telemarketing-sales-rule (collecting cases of business-to-business 
fraud that impersonated the government and violated the 
Telemarketing Sales Rule).
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    The Commission also takes notice of additional indications of the 
prevalence of government impersonation scams, which came after the 
ANPR's publication: The Federal Bureau of Investigation issued a Public 
Service Announcement on March 7, 2022, ``warning the public of ongoing 
widespread fraud schemes in which scammers impersonate law enforcement 
or government officials in attempts to extort money or steal personally 
identifiable information.'' \20\ Similarly, the Social Security 
Administration's Office of the Inspector General spearheaded a scam 
alert issued by multiple Federal law enforcement agencies on May 20, 
2022, warning the public of government impersonation scams involving 
the reproduction of Federal law enforcement credentials and badges.\21\ 
Additionally, the Commission recently noted that, in some impersonation 
scams, fraudsters have instructed consumers to convert cash into 
cryptocurrency under false threats of government investigations or 
fraud.\22\
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    \20\ Public Service Announcement, Fed. Bureau of Investigation, 
Alert No. I-030722-PSA, FBI Warns of the Impersonation of Law 
Enforcement and Government Officials (Mar. 7, 2022), https://www.ic3.gov/Media/Y2022/PSA220307.
    \21\ Scam Alert, Soc. Sec. Admin. Off. of Inspector Gen., 
Federal Law Enforcement Agencies Warn of Impersonation Scam 
Involving Credentials and Badges (May 20, 2022), https://oig.ssa.gov/assets/uploads/scam-alert-law-enforcement-credentials.pdf.
    \22\ See Press Release, Fed. Trade Comm'n, New Analysis Finds 
Consumers Reported Losing More than $1 Billion in Cryptocurrency to 
Scams since 2021 (June 3, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/06/new-analysis-finds-consumers-reported-losing-more-1-billion-cryptocurrency-scams-2021 (``After 
cryptocurrency investment schemes, the next largest losses reported 
by consumers were on . . . Business and Government Impersonation 
Scams[.] Reports show these scammers often target consumers by 
claiming their money is at risk because of fraud or a government 
investigation and the only way to protect their cash is by 
converting it to cryptocurrency.'').
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    Several commenters discussed how a rule addressing impersonation 
should be drafted. For example, Broward County offered specific 
recommendations, including but not limited to prohibiting advertising 
that creates the impression of government affiliation or endorsement 
without express consent and requiring advertisers to prominently 
disclaim government affiliation or endorsement where it could be 
reasonably construed from silence.\23\ YouMail suggested that

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the proposed rule ``not be so prescriptive as to put a damper on 
private cybersecurity businesses' ability to develop and refine new, 
market-based tools to prevent electronic communications fraud, 
including impersonation fraud.'' \24\
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    \23\ See Broward Cmt. at 2.
    \24\ YouMail Cmt. at 11.
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    Two commenters, NAAG and USTelecom, explicitly addressed the 
Commission's questions regarding individuals or entities that provide 
the means and instrumentalities for impersonators to conduct such 
practices. NAAG asserted that impersonators ``often use other 
companies' products and services to execute their scams,'' such as 
``marketing companies, call centers, attorneys, third-party mailing 
services, payment processors, lead list providers, remote offices . . . 
[d]ating websites, and social media . . . .'' \25\ It also addressed 
the Commission's question regarding the circumstances under which the 
provision of means and instrumentalities should be considered deceptive 
or unfair, remarking that ``when an entity provides substantial 
assistance or support to impersonators and knows or should have known 
that their products [or] services are being used in a fraudulent 
impersonation scheme, that company could also be held liable under the 
proposed impersonation rule.'' \26\ Similarly, USTelecom also 
recommended liability for ``individuals or entities that provide the 
means and instrumentalities for impersonators . . . such as how the FTC 
has used the [Telemarketing Sales Rule] against robocall enablers,'' 
but noted that the proposed rule ``should make clear that liability . . 
. requires proof of knowledge of such fraud or conscious avoidance of 
it, consistent with FTC precedent and [Telemarketing Sales Rule] and 
Section 5 jurisprudence.'' \27\ Somos, Inc., which manages registry 
databases for the telecommunications industry, similarly encourages the 
``[p]rosecution of . . . those knowingly aiding and abetting'' 
impersonated toll-free numbers.\28\
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    \25\ NAAG Cmt. at 8.
    \26\ Id. at 10.
    \27\ USTelecom Cmt. at 3-4.
    \28\ Somos Cmt. at 3, 5.
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    Several commenters recommended additional action to a proposed 
rulemaking, including the development of educational workshops and 
materials,\29\ and increased collaboration between the Commission and 
other government agencies, businesses, and trade associations to combat 
impersonation fraud.\30\ For example, WMC Global, a cybersecurity 
company, recommended that government agencies invest in ``phishing kit 
intelligence''--one of the tools the company states it uses to identify 
impersonators responsible for credential phishing attacks.\31\ YouMail 
encourages the Commission to work with industry groups ``that develop 
methods, techniques, and standards that advance the fight against 
robocalls and related fraud,'' which can serve to ``help educate the 
public about how those tools can be used for self-protection against 
impersonation.'' \32\ Somos expressed a willingness to assist law 
enforcement's prosecution of impersonators that spoof a company's Toll-
Free Number (TFN) for their CallerID, but use a different TFN as a call 
back number, which leads consumers to believe they are communicating 
with an honest business.\33\ Somos states that it can always provide 
the identity of the entity that reserved the TFN, which law 
enforcement, using subpoenas, can traceback to the subscriber or U.S. 
point of entry that likely committed the fraud or knowingly aided and 
abetted the activity.\34\
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    \29\ See USTelecom Cmt. at 3; NAAG Cmt. at 13; YouMail Cmt. 9-
10; WMC Cmt. at 5; NCTA Cmt. at 2; CTIA Cmt.; Pelton Cmt. at 5; ECA 
Cmt. at 2-3; AAFA Cmt. at 3; CTA Cmt. at 3-7; YouMail Cmt. at 10; 
DIRECTV Cmt. at 2.
    \30\ See YouMail Cmt. at 10; WMC Cmt. at 5; Somos Cmt. at 6.
    \31\ WMC Cmt. at 1, 5.
    \32\ YouMail Cmt. at 10.
    \33\ See Somos Cmt. at 3, 6.
    \34\ Id.
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B. Comments About the Impersonation of Businesses

    The ANPR noted that business impersonation scams cause an 
``enormous amount of financial harm to the public'' and are widespread: 
``From January 1, 2017, through September 30, 2021, consumers reported 
being defrauded of roughly $852 million in 753,555 business 
impersonation incidents.'' \35\ The comments received about the 
impersonation of businesses bolster this conclusion.
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    \35\ ANPR, 86 FR 72901.
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    The Commission received 15 comments that specifically addressed the 
widespread impersonation of businesses from consumers, trade 
associations, and businesses.\36\ Consumers submitted comments about 
various business impersonators they encountered, including 
impersonators of Microsoft \37\ and Apple.\38\ Several of these 
impersonated companies submitted their own comments relaying that 
impersonation of their businesses causes severe harm to consumers as 
well as to their own business.\39\
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    \36\ See ECA Cmt.; AVIXA Cmt.; EDPA Cmt.; AEM Cmt; AAFA Cmt.; 
NCTA Cmt.; US Telecom Cmt.; NAAG Cmt.; PCH Cmt.; YouMail Cmt; WMC 
Cmt; IHA Cmt.; DIRECTV Cmt.; Somos Cmt.; NAB Cmt..
    \37\ See, e.g., Betty Hanley, Cmt. on ANPR (Feb. 23, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0163 (``Hanley 
Cmt.'').
    \38\ See, e.g., Maximo Estebar, Cmt. on ANPR (Feb. 23, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0157 (``Estebar 
Cmt.''); Anonymous, Cmt. on ANPR (Feb. 16, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0044 (``0044 Cmt.'').
    \39\ See Microsoft Corp., Cmt. on ANPR (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0135 (``Microsoft Cmt.''); 
Apple, Inc., Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0159 (``Apple Cmt.'').
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    The Commission received several comments from trade associations 
that represent groups engaged in the face-to-face business events 
industry. Five trade associations representing businesses partaking in 
conferences, trade shows, and other face-to face business events 
submitted comments noting that they are frequently targets of business 
impersonation.\40\ These comments outlined two prevalent types of 
business impersonation fraud: hotel reservation scams and attendee 
list-sale scams. A hotel reservation scam involves scammers 
impersonating housing providers of a particular conference or event and 
tricking consumers into purchasing bogus hotel rooms.\41\ Perpetrators 
of attendee list-sale scams contact face-to-face exhibitors and sell 
fake attendee lists.\42\ They often use the event organizer's name and 
logo to bolster the illusion that they are, or are affiliated with or 
endorsed by, the event organizer.\43\
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    \40\ See EDPA Cmt.; ECA Cmt.; AEM Cmt.; AVIXA Cmt.; NAB Cmt.
    \41\ See ECA Cmt. at 2; EDPA Cmt.; AEM Cmt. at 1; AVIXA Cmt.
    \42\ See ECA Cmt. at 2; EDPA Cmt.; AEM Cmt. at 1; AVIXA Cmt.
    \43\ See ECA Cmt. at 2; EDPA Cmt; AEM Cmt. at 1; AVIXA Cmt.
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    The National Association of Broadcasters (``NAB'') also expressed 
its support for the initiation of a rulemaking to address impersonation 
because of its experience hosting an annual convention.\44\ NAB states 
that business impersonation harms numerous small businesses that often 
do not have the resources to properly protect themselves.\45\
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    \44\ See NAB Cmt. at 1-2.
    \45\ See id.
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    The American Apparel & Footwear Association (``AAFA'') states that 
the AAFA and the roughly 1,000 brands it represents are frequent 
targets of

[[Page 62744]]

business impersonation.\46\ The impersonators use company or 
organization trademarks and logos in the signature blocks of fraudulent 
email solicitations to help perpetrate these schemes.\47\ The AAFA 
comment notes that impersonation is a widespread issue in the non-
profit trade association industry.\48\ Another trade association, the 
International Housewares Association,\49\ and a consulting firm for 
construction companies, Cotney Attorneys & Consultants,\50\ submitted 
comments that also expressed concern about rampant impersonation fraud 
surrounding trade shows and conferences.
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    \46\ See AAFA Cmt. at 1.
    \47\ See id.
    \48\ See id. at 2.
    \49\ See IHA Cmt. at 1.
    \50\ See Cotney Attorneys & Consultants, Cmt. on ANPR, at 1 
(Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0140 (``Cotney Cmt.'').
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    Four trade associations that represent businesses in the 
telecommunications and technology industries submitted comments noting 
that these industries are frequently targeted for business 
impersonation fraud. The internet & Television Association (``NCTA''), 
a trade association for the United States cable television industry, 
states that its members provide television service to almost 80% of the 
nation's cable television customers.\51\ NCTA does not explicitly take 
a position on the proposed rulemaking, but states that it stands 
``ready to assist the FTC with its educational efforts.'' \52\ NCTA 
identified two common types of business scams, a payment scam and 
unauthorized reselling scam. A payment scam involves scammers 
impersonating employees or vendors and calling customers or prospective 
customers in an effort to gain their personal information, such as 
credit card information, bank account numbers, Social Security numbers, 
and passwords.\53\ An unauthorized reselling scam involves scammers 
fraudulently using member brands to collect customer or employee 
information or unlawfully reselling access to the company's 
network.\54\ NCTA states that it takes considerable action to fight 
these scams, including communicating regularly with customers and 
providing educational materials online, engaging with the communities 
at town halls, and directing consumers to FTC resources.\55\
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    \51\ See NCTA Cmt. at 2.
    \52\ Id.
    \53\ See id.
    \54\ See id.
    \55\ See id.
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    USTelecom states that it supports the efforts of Federal agencies, 
including the FTC, to hold impersonators accountable for fraud, 
including impersonators using telephone networks to perpetrate their 
scams.\56\ It notes that, every day, these impersonators spam the U.S. 
telephone network with robocalls and voice phishing calls pretending to 
be private companies.\57\ USTelecom's Industry Traceback Group tracks 
these calls and identifies the percentage of bank scams, health 
insurance scams, and Amazon impersonators, among others.\58\ According 
to USTelecom, most of these calls originate from outside of the United 
States, from countries such as India, Pakistan, Mexico, the United 
Kingdom, and Australia.\59\
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    \56\ See USTelecom Cmt. at 1.
    \57\ See id.
    \58\ See id. at 2.
    \59\ See id.
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    Consumer Technology Association (``CTA'') states that it is North 
America's largest technology trade association.\60\ CTA and its members 
are frequently targeted for impersonation fraud.\61\ CTA states that it 
has seen a growing number of impersonation fraud through email 
solicitations, including impersonation attempts of CTA 
representatives.\62\ CTA also states that business impersonation 
victimizes non-profit organizations, such as the CTA Foundation.\63\ 
CTA supports an FTC rule that would prohibit deceptive impersonation of 
for-profit and non-profit businesses alike.\64\ It recommends that the 
FTC not focus rulemaking efforts on communication channels; instead, it 
encourages the FTC to work with the private sector to improve detection 
and reporting mechanisms to prevent impersonation schemes.\65\ Finally, 
CTA suggests that the FTC consider partnership with other Federal 
agencies, the private sector, and non-profits to gather information and 
help prevent impersonation fraud.\66\
---------------------------------------------------------------------------

    \60\ Consumer Tech. Ass'n, Cmt. on ANPR, at 1 (Feb. 17, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0091 (``CTA 
Cmt.'').
    \61\ See id.
    \62\ See id. at 4.
    \63\ See id. at 5-6.
    \64\ See id.
    \65\ Id. at 9.
    \66\ See id.
---------------------------------------------------------------------------

    CTIA, a trade association for wireless-service providers, proposes 
that the FTC continue to use its existing tools to combat impersonation 
fraud.\67\ CTIA suggests that, if the FTC proceeds with a new rule to 
address impersonation fraud, the rule should ``narrowly'' target bad 
actors and continue to coordinate with government partners and the 
private sector.\68\ CTIA lists various industry efforts to help prevent 
robocalls from reaching consumers and discusses its implementation of 
``Messaging Principles and Best Practices'' to help stop bad 
actors.\69\ CTIA states that its members have been assisting Federal 
and State enforcement actions against impersonation frauds.\70\
---------------------------------------------------------------------------

    \67\ See CTIA, Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0161 (``CTIA Cmt.'').
    \68\ Id.
    \69\ Id. at 7-10.
    \70\ See id.
---------------------------------------------------------------------------

    The Commission received 11 comments from businesses or trade 
associations that are frequently impersonated; six of these comments 
were from companies in the telecommunications and technology 
industries.\71\
---------------------------------------------------------------------------

    \71\ See YouMail Cmt.; WMC Cmt.; DIRECTV Cmt.; Microsoft Cmt.; 
Apple Cmt.; Somos Cmt.; PCH Cmt.; Informa Cmt.; AAFA Cmt.; NAB Cmt.; 
CTA Cmt.
---------------------------------------------------------------------------

    For example, DIRECTV submitted a comment supporting the 
Commission's effort to fight impersonation fraud \72\ and states that 
many impersonators pose as representatives of DIRECTV in an effort to 
commit prepaid card fraud, which causes significant harm to both 
consumers and businesses.\73\ According to DIRECTV, impersonators 
falsely offer consumers discounts on its service in exchange for the 
consumer's providing a prepaid credit card or gift card to a third-
party e-commerce website.\74\ This conduct can result in significant 
financial loss for consumers.\75\ DIRECTV cites a YouMail, Inc. 
estimate that Americans received millions of calls over the course of 
one month in late 2021 from scammers claiming to be from companies, 
such as Amazon, Apple, PayPal, and Wells Fargo, and making false claims 
about the consumers' accounts or information with these companies.\76\ 
DIRECTV states that impersonation fraud harms its business by forcing 
it to dedicate resources to fighting the scams and also states that the 
scams hurt its ability to interest consumers in legitimate 
services.\77\
---------------------------------------------------------------------------

    \72\ See DIRECTV Cmt. at 1.
    \73\ See id. at 2-4.
    \74\ See id. at 4-6.
    \75\ See id. at 2.
    \76\ See id.
    \77\ See id. at 3-4.
---------------------------------------------------------------------------

    Apple, Inc., submitted a comment that urges the Commission to adopt 
a rule targeting bad actors (and their ``facilitators'' that are 
engaging in impersonation fraud) without stifling legitimate business 
activity.\78\ Apple states that it has worked cooperatively with the 
FTC and other Federal agencies to protect consumers from

[[Page 62745]]

impersonation fraud.\79\ Apple notes the prevalence of fraud in which 
impersonators steal money from consumers through gift card scams.\80\ 
Apple states that, as a result of aggressive civil and criminal 
enforcement, impersonation fraud levels have decreased.\81\ Apple 
states that impersonators who have obtained stolen gift cards use gray 
markets \82\ to sell the items purchased with those cards, making it 
harder for consumers to detect the fraud.\83\ Apple maintains that gray 
markets are primary ``means and instrumentalities'' that impersonators 
use to conduct their scams.\84\ One consumer submitted a comment 
describing how he had had fallen prey to Apple employee 
impersonators.\85\ Another commenter, a former Apple employee, 
described the many stories she had heard of customers falling victim to 
Apple employee impersonators.\86\
---------------------------------------------------------------------------

    \78\ Apple Cmt.
    \79\ See id.
    \80\ See id.
    \81\ See id. Apple notes that complaints about unauthorized 
calls by individuals listed on the FTC's Do Not Call Registry 
decreased after the Commission sued a VoIP provider for originating 
illegal robocalls.
    \82\ Gray markets ``allow consumers to sell physical and digital 
goods at a discounted price. Impersonators who have obtained stolen 
gift card funds utilize gray markets to sell items purchased with 
those funds to other consumers who may be unaware of the fraudulent 
source of the items they are purchasing.'' Id.
    \83\ See id.
    \84\ Id.
    \85\ See Estebar Cmt.
    \86\ See 0044 Cmt.
---------------------------------------------------------------------------

    Microsoft Corporation strongly supports the Commission's decision 
to proceed with rulemaking to combat government and business 
impersonation fraud.\87\ Microsoft states that it is frequently 
impersonated in the form of technical support scams, in which 
individuals impersonate Microsoft employees to trick consumers into 
purchasing technical support services to fix non-existing software or 
device issues.\88\ Such impersonators often steal personal information 
from consumers and frequently install malware or other programs to do 
so.\89\ Microsoft's comment discusses its commitment to protecting 
customer privacy through its Digital Crimes Unit.\90\ Microsoft states 
that it has a database of roughly 600,000 consumer complaints regarding 
technical support scams.\91\ It also states that it has conducted 
consumer surveys regarding the prevalence of technology scams. In 2021, 
Microsoft commissioned YouGov to conduct an online survey of more than 
16,000 adult internet users in 16 countries.\92\ Microsoft maintains 
that the survey results demonstrate the strong need for additional 
protection of consumers from technical support scams.\93\
---------------------------------------------------------------------------

    \87\ See Microsoft Cmt. at 1.
    \88\ See id.
    \89\ See id.
    \90\ See id. at 2.
    \91\ See id. at 3.
    \92\ See id.
    \93\ See id.
---------------------------------------------------------------------------

    According to Microsoft, the YouGov survey shows that 67% of U.S. 
consumers have encountered a technical support scam in the previous 
year.\94\ The study did show that marginally fewer consumers have been 
exposed to technical support scams in recent years than in 2018.\95\ 
The YouGov survey also showed that consumers have been targeted with 
impersonation scams involving Facebook, Apple, Google, and Amazon.\96\
---------------------------------------------------------------------------

    \94\ See id.
    \95\ See id.
    \96\ See id. at 3-4.
---------------------------------------------------------------------------

    Microsoft states that consumers often lose hundreds and sometimes 
thousands of dollars to technical support impersonation scams.\97\ 
According to Microsoft, the YouGov survey shows that the Millennial 
Generation and Generation Z have the highest losses from technical 
support scams: One in 10 members of these demographics fell victim to 
such a scam and lost money.\98\ The survey data shows that men are more 
likely to fall prey to a technical support scam.\99\
---------------------------------------------------------------------------

    \97\ See id. at 4.
    \98\ See id.
    \99\ See id.
---------------------------------------------------------------------------

    Microsoft states that there has been a shift from the traditional 
``cold-call'' model that scammers use, often by using spoofed numbers 
and claiming to be a Microsoft employee, to deployment of automated 
pop-ups/malware on websites to redirect consumers to scam 
websites.\100\ It states that technical support scams typically make 
strong claims via pop-up websites, email and other online 
platforms,\101\ in addition to telephone calls where callers falsely 
represent themselves as Microsoft employees.\102\ According to 
Microsoft, technical support impersonators often share resources, which 
allows them to copy each other's business models and limit risk of 
enforcement action.\103\
---------------------------------------------------------------------------

    \100\ See id. at 5-6.
    \101\ See id. at 6.
    \102\ See id.
    \103\ See id.
---------------------------------------------------------------------------

    Addressing means-and-instrumentalities liability, Microsoft states 
that scammers typically rely on payment processors to receive money 
from victims of these scams.\104\ The scammers also utilize affiliate 
marketing services to advertise to consumers through malicious ads and 
pop-up windows.\105\
---------------------------------------------------------------------------

    \104\ See id.
    \105\ See id.
---------------------------------------------------------------------------

    Microsoft states that a systematic approach is critical to address 
these scams, especially because private actors are limited in their 
ability to recover money for victims.\106\ Microsoft notes that the 
FTC's new rule would ``clarify and strengthen the FTC's authority to 
address these scams, building upon the FTC's existing authority under 
the FTC Act and existing regulation, including the Telemarketing Sales 
Rule.'' \107\
---------------------------------------------------------------------------

    \106\ See id.
    \107\ Id. The Commission also received a comment from a consumer 
who fell prey to Microsoft impersonators. See Hanley Cmt.
---------------------------------------------------------------------------

    Somos, Inc. states in its comment that, when scammers use Toll-Free 
Numbers (TFNs) to execute their scams, it causes consumers to lose 
confidence in TFNs.\108\ It reports that, since 2017, Somos and partner 
organizations have shut down more than 18,000 TFNs used by 
impersonation scammers.\109\ Somos discusses anecdotal evidence based 
on experience with companies that have asked Somos to help shut down 
TFNs utilized by scammers.\110\ Somos states that it works with more 
than 80 companies whose customers have been targeted by impersonation 
scams--65 utility companies, four tech companies, three retailers, and 
10 miscellaneous entities.\111\ Somos states that there has been an 
increase in the number of TFNs reported as impersonation scams.\112\
---------------------------------------------------------------------------

    \108\ See Somos Cmt. at 1.
    \109\ See id. at 2.
    \110\ See id.
    \111\ See id.
    \112\ See id. at 4.
---------------------------------------------------------------------------

    The Commission received a comment from Erik M. Pelton & Associates, 
a trademark law firm in Virginia, requesting that it include trademark 
scams in its definition of impersonation scams.\113\ The comment states 
that trademark scams have become widespread.\114\ Specifically, the 
comment states that a Pakistan-based company used over 200 fake 
websites to impersonate the United States Patent and Trademark Office 
(USPTO) and offer trademark filing services.\115\ The law firm urges 
transparency from the FTC, USPTO, and United States Postal Inspection 
Service about the pervasiveness of trademark scams and the measures 
being taken to address

[[Page 62746]]

these scams.\116\ The comment also recommends that the FTC investigate 
the means used to collect the money unlawfully taken from victims.\117\ 
The comment also suggests that the FTC adopt a more robust 
impersonation scam reporting system for consumers and businesses.\118\
---------------------------------------------------------------------------

    \113\ See Erik M. Pelton & Associations, Consultants, Cmt. on 
ANPR, at 1 (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0156 (``Pelton Cmt.'').
    \114\ See id. at 3.
    \115\ See id.
    \116\ See id.
    \117\ See id. at 5.
    \118\ Id.
---------------------------------------------------------------------------

C. Other Comments

    The Commission received a number of comments that advocated for 
``non-profit'' entities to be included in the proposed rule's 
definition of businesses that can be impersonated.\119\ For example, 
The National Association of State Charity Officials (``NASCO''), an 
association of state charity officials, state attorneys general, and 
other state officials who regulate charities, submitted a comment 
urging the Commission to consider including impersonation of charitable 
organizations in the rule.\120\ NASCO states that ``fraudulent 
practices of impersonating legitimate charitable causes and charitable 
organizations persist across the country.'' \121\ It urges the FTC to 
ensure that the impersonation rule would cover individual and 
professional fundraiser impersonators.\122\ NASCO notes that the FTC 
worked with 38 state charity regulators to help shut down a 
telemarketing scam that involved over 100 million donations.\123\
---------------------------------------------------------------------------

    \119\ Nat'l Ass'n of State Charity Officials (``NASCO''), Cmt. 
on ANPR, at 1 (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0165 (``NASCO Cmt.''); ECA Cmt. at 2; Cotney Cmt. at 
2; CTA Cmt. at 3-7.
    \120\ See NASCO Cmt. at 1.
    \121\ Id. at 2.
    \122\ See id. at 3.
    \123\ See id.
---------------------------------------------------------------------------

III. Reasons for the Proposed Rule on Impersonation of Government and 
Businesses

    The Commission believes that the proposed rule will substantially 
improve its ability to combat the most prevalent impersonation fraud 
and may also strengthen deterrence against this fraud in the first 
instance. While government impersonation and business impersonation are 
already unlawful under Section 5 of the FTC Act, which prohibits unfair 
or deceptive acts or practices, the proposed rule will allow the 
Commission to seek civil penalties against the violators and more 
readily obtain monetary redress for their victims. The rule would not 
impose new burdens on honest businesses and instead provide benefits to 
businesses whose brands are harmed by business impersonators.

A. Need for and Objectives of the Proposed Rule on Impersonation of 
Government and Businesses

    The Commission's objective in commencing this rulemaking is to 
expand the remedies available to it in combatting common and injurious 
forms of fraud. In the ANPR, the Commission described how a recent U.S. 
Supreme Court decision,\124\ which overturned 40 years of precedent 
from the U.S. Circuit Courts of Appeal uniformly holding that the 
Commission could take action under Section 13(b) of the FTC Act to 
return money unlawfully taken from consumers through unfair or 
deceptive acts or practices, has made it significantly more difficult 
for the Commission to return money to injured consumers.\125\ Without 
Section 13(b) as it had historically been understood, the only method 
the Commission has to return money unlawfully taken from consumers is 
Section 19, which provides two paths for consumer redress. The longer 
path requires the Commission to first win a case in--and any appeal 
arising from--its administrative court. Then, to recover money for 
consumers, the Commission must prove that the violator engaged in 
fraudulent or dishonest conduct \126\ in a second action in Federal 
court. The shorter path, which allows the Commission to recover 
directly through a Federal court action or obtain civil penalties 
directly from a Federal court, is available only when a rule has been 
violated.\127\
---------------------------------------------------------------------------

    \124\ See AMG Cap. Mgmt., LLC v. FTC, 141 S. Ct. 1341, 1352 
(2021).
    \125\ See ANPR, 86 FR 72901 & n.24 (discussing AMG Cap. Mgmt.).
    \126\ See 15 U.S.C. 57b(a)(2) (``If the Commission satisfies the 
court that the act or practice to which the cease and desist order 
relates is one which a reasonable man would have known under the 
circumstances was dishonest or fraudulent, the court may grant 
relief.'').
    \127\ Compare 15 U.S.C. 57b(a)(1) (rule violations), with id. 
57b(a)(2) (Section 5 violations).
---------------------------------------------------------------------------

    The proposed rule will make available the shorter path in a broader 
set of Commission enforcement actions. Currently, the Commission can 
directly pursue in Federal court Section 19 remedies, including civil 
penalties and consumer redress, for impersonation fraud only if that 
fraud violates the Commission's Telemarketing Sales Rule, Mortgage 
Assistance Relief Services Rule, or R-Value Rule, which expressly 
prohibit impersonation fraud but apply only in specific contexts.\128\ 
Outlawing impersonation of government and business by rule no matter 
what the context expands the Commission's enforcement toolkit and 
allows it to stop and deter harmful conduct and make American consumers 
whole when they have been wronged. Because impersonation fraud is so 
prevalent and so harmful, the unlocking of additional remedies through 
this rulemaking, particularly the possibility of seeking civil 
penalties against violators as well as obtaining redress for their 
victims, will allow the Commission to more effectively police 
impersonation scams that plague consumers.
---------------------------------------------------------------------------

    \128\ See TSR, 16 CFR 310.3(a)(2)(vii) (prohibiting 
misrepresentations with respect to a ``seller's or telemarketer's 
affiliation with, or endorsement or sponsorship by, any person or 
government entity''); R-Value Rule, 16 CFR 460.21 (``Do not say or 
imply that a government agency uses, certifies, recommends, or 
otherwise favors your product unless it is true. Do not say or imply 
that your insulation complies with a governmental standard or 
specification unless it is true.''); Regulation O (Mortgage 
Assistance Relief Services), 12 CFR 1015.3(b)(3) (prohibiting 
misrepresentations that ``a mortgage assistance relief service is 
affiliated with, endorsed or approved by, or otherwise associated 
with: (i) The United States government, (ii) Any governmental 
homeowner assistance plan, (iii) Any Federal, State, or local 
government agency, unit, or department, (iv) Any nonprofit housing 
counselor agency or program, (v) The maker, holder, or servicer of 
the consumer's dwelling loan, or (vi) Any other individual, entity, 
or program'').
---------------------------------------------------------------------------

B. Overview and Scope of Proposed Rule on Impersonation of Government 
and Businesses

    The Commission's proposed rule is straightforward. It borrows from 
existing rules and statutory definitions by declaring that 
impersonation of government and businesses is unlawful.\129\ As noted 
above, case law and the Commission's experience, as well as the 
comments and other evidence cited herein, are replete with examples of 
such impersonation.
---------------------------------------------------------------------------

    \129\ See id.
---------------------------------------------------------------------------

    The prohibition against impersonating government in proposed Sec.  
461.2 would cover unlawful conduct by persons who misrepresent that 
they are or are affiliated with a government or government officer by, 
including but not limited to: (1) calling, messaging, or otherwise 
contacting an individual or entity while posing as a government or an 
officer or agent or affiliate or endorsee thereof, including by 
identifying a government or officer by name or by implication; (2) 
sending physical mail through any carrier using addresses, government 
seals or lookalikes, or other identifying insignia of a government or 
officer thereof; (3) creating a website or other electronic service 
impersonating the name, government seal, or identifying insignia of a 
government or officer thereof or using ``.gov'' or any lookalike, such 
as

[[Page 62747]]

``govusa.com''; (4) creating or spoofing an email address using 
``.gov'' or any lookalike; (5) placing advertisements that pose as a 
government or officer thereof against search queries for government 
services; and (6) using a government seal on a building, letterhead, 
website, email, vehicle, or other physical or digital place.
    The prohibition against impersonating businesses in Sec.  461.3 
would cover a variety of similarly unlawful conduct, including but not 
limited to: (1) calling, messaging, or otherwise contacting an 
individual or entity while posing as a business or an officer or agent 
or affiliate or endorsee thereof, including by naming a business by 
name or by implication, such as ``card member services'' or ``the car 
dealership''; (2) sending physical mail through any carrier using 
addresses, seals, logos, or other identifying insignia of a business or 
officer thereof; (3) creating a website or other electronic service 
impersonating the name, logo, insignia, or mark of a business or a 
close facsimile or keystroke error, such as ``ntyimes.com,'' 
``rnicrosoft.com,'' ``microsoft.biz,'' or 
``carnegiehall.tixsales.com''; (4) creating or spoofing an email 
address that impersonates a business; (5) placing advertisements that 
pose as a business or officer thereof against search queries for 
business services; and (6) using, without authorization, a business's 
mark on a building, letterhead, website, email, vehicle, or other 
physical or digital place.
    The rule, in proposed Sec.  461.4, also makes it unlawful to 
provide the means and instrumentalities for violations of proposed 
Sec. Sec.  461.2 and 461.3. Some commenters suggested that the 
Commission impose liability on a broader set of actors, namely those 
who assist and facilitate violations. The Telemarketing Sales Rule 
(``TSR'') does so, but the Commission cannot do so here. The TSR 
provides express statutory authorization for assisting-and-facilitating 
liability,\130\ a form of indirect liability. Sections 5 and 18 of the 
FTC Act contain no such express authorization. Instead, the case law 
describes a form of direct liability for a party who, despite not 
having direct contact with the injured consumers, ``passes on a false 
or misleading representation with knowledge or reason to expect that 
consumers may possibly be deceived as a result.'' \131\ In other words: 
``One who places in the hands of another a means of consummating a 
fraud or competing unfairly in violation of the Federal Trade 
Commission Act is himself guilty of a violation of the Act.'' \132\ 
Accordingly, the Commission proposes expressly to impose liability on 
those who provide the means and instrumentalities of violations of the 
prohibitions against impersonation of government and businesses, but it 
declines to seek to impose assisting-and-facilitating liability. An 
example of a violation of proposed Sec.  461.4's prohibition on 
providing the means and instrumentalities for impersonation is a person 
who fabricates official-looking Internal Revenue Service (IRS) Special 
Agent identification badges for sale. In this example, the person does 
not actually impersonate an IRS Special Agent, so does not violate 
proposed Sec.  461.2's prohibition against impersonating government 
officers but does provide the means and instrumentalities for others to 
do so, which violates proposed Sec.  461.4.
---------------------------------------------------------------------------

    \130\ See 15 U.S.C. 6102(a)(2) (``acts or practices of entities 
or individuals that assist or facilitate deceptive telemarketing'').
    \131\ Shell Oil Co., 128 F.T.C. 749 (1999).
    \132\ C. Howard Hunt Pen Co. v. FTC, 197 F.2d 273, 281 (3d Cir. 
1952).
---------------------------------------------------------------------------

    Several commenters raised questions about jurisdiction. The 
proposed rule is subject to all existing limitations of the law: of 
unfair or deceptive acts or practices under the FTC Act; of the FTC's 
jurisdiction; and of the U.S. Constitution--the Commission cannot bring 
a complaint to enforce the rule if the complaint would exceed the 
Commission's jurisdiction or offend the Constitution. One important 
jurisdictional subject for discussion is not-for-profit entities. The 
Commission is authorized to sue a corporation (including any company, 
trust, or association, incorporated or unincorporated) only when it is 
``organized to carry on business for its own profit or that of its 
members.'' \133\ Nevertheless, the proposed rule's definition of 
``business'' includes entities that are organized as not-for-profit 
entities. The reason is that persons, partnerships, or corporations 
that are organized for profit (including illicit profits) may 
impersonate a business that is not. For example, a scammer might 
impersonate a charity. Whether organized as a person, partnership, or 
corporation, this hypothetical scammer is within the jurisdiction of 
the FTC, even if the impersonated charity is not. Accordingly, the 
rule, in proposed Sec.  461.1, defines a ``business'' that may be 
impersonated to include non-profits.\134\
---------------------------------------------------------------------------

    \133\ 15 U.S.C. 44.
    \134\ State laws likely forbid impersonation by a bona fide non-
profit organization even if would not be subject to FTC 
jurisdiction.
---------------------------------------------------------------------------

    One commenter worried that the rule, if applied literally in an 
unanticipated way, could chill legitimate speech.\135\ The proposed 
rule, however, sweeps no more broadly than the existing prohibition 
against unfair and deceptive practices in Section 5 of the FTC Act. 
Because misrepresentations must be ``material'' and ``in or affecting 
commerce,'' a communication that is not material to a commercial 
transaction, such as impersonation in artistic or recreational 
costumery or impersonation in connection with political or other non-
commercial speech, is not prohibited by the proposed rule.
---------------------------------------------------------------------------

    \135\ See Cason Reilly, Cmt. on ANPR, at 1-3 (Feb. 22, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0136.
---------------------------------------------------------------------------

C. The Rulemaking Process

    The Commission can decide to finalize the proposed rule if the 
rulemaking record, including the public comments in response to this 
NPRM, supports such a conclusion. The Commission may, either on its own 
initiative or in response to a commenter's request, engage in 
additional processes, which are described in 16 CFR 1.12 and 1.13. If 
the Commission on its own initiative decides to conduct an informal 
hearing, or if a commenter files an adequate request for such a 
hearing, then a separate notice will issue under 16 CFR 1.12(a). Based 
on the comment record and existing prohibitions against impersonation 
of government and businesses under Section 5 of the FTC Act, the 
Commission does not here identify any disputed issues of material fact 
necessary to be resolved at an informal hearing. The Commission may 
still do so later, on its own initiative or in response to a persuasive 
showing from a commenter.

IV. Preliminary Regulatory Analysis

    Under Section 22 of the FTC Act, the Commission, when it publishes 
any NPRM, must include a ``preliminary regulatory analysis.'' 15 U.S.C. 
57b-3(b)(1). The required contents of a preliminary regulatory analysis 
are (1) ``a concise statement of the need for, and the objectives of, 
the proposed rule,'' (2) ``a description of any reasonable alternatives 
to the proposed rule which may accomplish the stated objective,'' and 
(3) ``a preliminary analysis of the projected benefits and any adverse 
economic effects and any

[[Page 62748]]

other effects'' for the proposed rule and each alternative, along with 
an analysis ``of the effectiveness of the proposed rule and each 
alternative in meeting the stated objectives of the proposed rule.'' 15 
U.S.C. 57b-3(b)(1)(A)-(C). This NPRM already provided the concise 
statement of the need for, and the objectives of, the proposed rule in 
Item III.A above. It addresses the other requirements below.

A. Reasonable Alternatives and Anticipated Costs and Benefits

    The Commission believes that the benefits of proceeding with the 
rulemaking will significantly outweigh the costs, but it welcomes 
public comment and data (both qualitative and quantitative) on any 
benefits and costs to inform a final regulatory analysis. Critical to 
the Commission's analysis is the legal consequence that any eventual 
rule would allow not only for monetary relief to victims of rule 
violations but also for the imposition of civil penalties against 
violators. Such results are likely to provide benefits to consumers and 
competition, as well as to the agency, without imposing any significant 
costs on consumers or competition. It is difficult to quantify with 
precision what all those benefits may be, but it is possible to 
describe them qualitatively.
    It is useful to begin with the scope of the problem the proposed 
rule would address. As discussed in the ANPR, consumers reported 
1,362,996 instances of government impersonation and associated total 
losses of $922,739,109 from January 1, 2017 through September 30, 
2021.\136\ Since then, consumers reported another 46,606 instances of 
government impersonation in the fourth quarter of 2021 and 46,950 in 
the first quarter of 2022.\137\ For business impersonation, the ANPR 
noted that, from January 1, 2017 through September 30, 2021, consumers 
reported being defrauded of roughly $852 million in 753,555 
incidents.\138\ Since then, consumers reported another 96,341 instances 
of business impersonation in the fourth quarter of 2021 and 79,057 in 
the first quarter of 2022.\139\ For the time period discussed in the 
ANPR, average annual total consumer losses reported from business 
impersonation were roughly $180 million, and average annual total 
consumer losses reported from government impersonation were roughly 
$190 million. With all the 2021 data in, total reported consumer losses 
last year due to government impersonation topped $445 million over 
396,601 reported incidents.\140\
---------------------------------------------------------------------------

    \136\ See ANPR, 86 FR 72901, 72902.
    \137\ See Fed. Trade Comm'n, Fraud Reports: Subcategories over 
Time, Tableau Public, https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/SubcategoriesOverTime 
(last visited June 24, 2022). See also Fed. Trade Comm'n, Consumer 
Sentinel Network Data Book 2020, 4 (2022), https://www.ftc.gov/system/files/ftc_gov/pdf/CSN%20Annual%20Data%20Book%202021%20Final%20PDF.pdf.
    \138\ See ANPR, 86 FR 72901.
    \139\ See Fed. Trade Comm'n, Fraud Reports: Subcategories over 
Time, Tableau Public, https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/SubcategoriesOverTime 
(last visited June 24, 2022).
    \140\ See Fed. Trade Comm'n, Explore Government Imposter Scams, 
Tableau Public, https://public.tableau.com/app/profile/federal.trade.commission/viz/GovernmentImposter/Infographic (last 
visited June 24, 2022).
---------------------------------------------------------------------------

    Reports of government and business impersonation remain high. The 
consumer losses remain large, with, for government impersonation scams 
alone, a median loss of $1,322 and total losses of $103 million 
reported for government impersonation in the first quarter of 
2022.\141\ If the trends from the first quarter of 2022 continue, the 
annual consumer loss reported just for government impersonation will 
again exceed $400 million. And these figures cover only those incidents 
that are reported to the Commission; plainly, the prevalence of 
government and business impersonation in reality is higher than what 
gets reported to the Commission.
---------------------------------------------------------------------------

    \141\ See id.
---------------------------------------------------------------------------

    It follows that, qualitatively, government and business 
impersonation cases have recently constituted and are likely to 
constitute in the future a meaningful share of Commission enforcement 
actions,\142\ and in many of those actions a rule against impersonation 
may prove to be the only or the most practicable means for achieving 
consumer redress. As such, the most significant anticipated benefit of 
a final rule is the ability to obtain monetary relief, especially 
consumer redress, as well as civil penalties. While such relief could 
also be obtained with an existing rule, such as the TSR, in many cases, 
by no means do all impersonation scams implicate an existing rule, and 
there is no reason to expect them all to do so in the future.\143\
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    \142\ Impersonation scams overall, including those that are not 
covered by the proposed rule's scope of government and business 
impersonation, constitute 17.16% of all consumer complaints received 
in the Consumer Sentinel Network in 2021. See Fed. Trade Comm'n, 
Consumer Sentinel Network Data Book 2020, 6 (2022), https://www.ftc.gov/system/files/ftc_gov/pdf/CSN%20Annual%20Data%20Book%202021%20Final%20PDF.pdf.
    \143\ The Commission has brought many impersonation cases in 
which no existing rule was violated or no relief under a rule was 
sought. See, e.g., Compl. at 12-13, FTC v. Modern Tech. Inc., No. 
13-cv-8257 (N.D. Ill. filed Nov. 18, 2013) (only counts under 
Section 5); Compl. at 9-10, FTC v. Gerber Prods. Co., No. 2:14-cv-
06771-SRC-CLW (D.N.J. filed Oct. 30, 2014) (only counts under 
Sections 5 and 12(a)); Compl. at 17-19, 22, FTC v. DOTAuthority.com, 
Inc., No. 16-cv-62186 (S.D. Fla. filed Sept. 13, 2016) (seeking 
relief only for counts under Section 5); Compl. at 8-9, FTC v. 
Moore, No. 5:18-cv-01960 (C.D. Cal. filed Sept. 13, 2018) (only 
counts under Section 5); Compl. at 21-22, FTC v. Forms Direct, Inc. 
(Am. Immigr. Ctr.), No. 3:18-cv-06294 (N.D. Cal. filed Oct. 16, 
2018) (only counts under Section 5); Am. Compl. at 8-9, FTC v. 
Starwood Consulting, LLC, No. 4:18-cv-02368 (S.D. Tex. filed Mar. 
27, 2019) (only counts under Section 5 from FTC); Compl. at 8-9, FTC 
v. Ponte Invs., LLC, No. 1:20-cv-00177-JJM-PAS (D.R.I. filed Apr. 
17, 2020) (only counts under Section 5).
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    To succeed at obtaining consumer redress without a rule violation, 
the Commission must first file a complaint alleging that the 
impersonator violated Section 5 and prevail in securing a cease-and-
desist order. Then, to secure consumer redress for victims of the 
impersonator, the Commission must file follow-on litigation under 
Section 19, and without a rule this second litigation requires the 
Commission to allege and persuade a court in each case that the conduct 
at issue is ``one which a reasonable man would have known under the 
circumstances was dishonest or fraudulent.'' \144\ Although this 
standard is likely to be met in impersonation cases, having to do so in 
each case requires a greater expenditure of Commission resources than 
in cases with a rule violation, which do not require a second 
litigation or separate proof of knowledge that the conduct was 
dishonest or fraudulent.
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    \144\ 15 U.S.C. 57b(a)(2). Depending on the egregiousness of the 
misconduct and the harm it is causing, the Commission also may seek 
preliminary injunctive relief in federal court. 15 U.S.C. 53(b).
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    Accordingly, without a rule, the Section 19 path often requires 
consumer victims to wait many years before the Commission can deliver 
redress to them, even six years or more.\145\ Although the Commission 
does not have extensive experience pursuing Section 19 cases without a 
rule violation, its limited experience supports a reasonable estimate 
that such litigation can take at least twice as long as litigation with 
a rule violation. Because of the prevalence of impersonation scams, the 
Commission will not have a shortage of bad actors to investigate, and 
it could invest the savings of enforcement resources from having a

[[Page 62749]]

rule into investigating and, where the facts warrant, bringing 
enforcement actions in additional impersonation matters. In sum, the 
significant potential consumer-redress benefits of a rule are that the 
Commission could put a stop to more impersonation scams, return money 
to more victims, and win that redress more quickly.
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    \145\ See, e.g., Press Release, Fed. Trade Comm'n, Marketers of 
Ab Force Weight Loss Device Agree to Pay $7 Million for Consumer 
Redress (Jan. 14, 2009), https://www.ftc.gov/news-events/news/press-releases/2009/01/marketers-ab-force-weight-loss-device-agree-pay-7-million-consumer-redress (describing a 2009 settlement of a follow-
on Section 19 action against Telebrands Corp. that was brought after 
litigation finally concluded of a 2003 administrative complaint 
alleging violations of Section 5--in this case, the Section 19 
action settled instead of being litigated to judgment, which would 
have taken more time).
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    A secondary potential benefit is deterrence of impersonation scams. 
The potential deterrence from a rule should not be overstated; because 
impersonation scams are already clearly unlawful, deterrence would 
affect only bad actors who are comfortable breaking the law under the 
existing set of consequences but would opt not to break the law if 
potentially subject to civil penalties and swifter redress. Scholarship 
on deterrence suggests that the potential severity of consequences, 
such as high civil penalties, is less likely to influence behavior than 
the perceived likelihood of detection and punishment.\146\ Still, an 
eventual rule that makes it less likely that impersonators get to keep 
their ill-gotten gains and more likely that they have to pay civil 
penalties can have only helpful deterrence effects, whatever their 
magnitude. And the publicity around this rulemaking process and any 
eventual rule could have the salutary effect of complementing the 
Commission's consumer education work by elevating public awareness of 
these prevalent forms of fraud, which could increase how often they are 
detected and reported.
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    \146\ See, e.g., Aaron Chalfin & Justin McCrary, Criminal 
Deterrence: A Review of the Literature, 55 J. Econ. Lit. 5 (2017), 
https://doi.org/10.1257/jel.20141147 (reviewing twenty years of 
studies, albeit in criminal rather than civil context, and finding 
stronger evidence for deterrent effect of perceived risk of 
detection than for severity of punishment).
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    If a final rule succeeds in deterring unlawful behavior, another 
potential benefit is that businesses that are frequently impersonated 
may have to spend less money to monitor the market for impersonators of 
their brand. Several businesses filed comments indicating that 
monitoring for impersonation required significant expenditures of funds 
and personnel.\147\ Quantifying the savings those companies might 
achieve from deterrence of impersonation activity, however, would 
require substantial speculation. At the same time, the proposed rule is 
unlikely to impose costs on honest businesses, and no commenter 
suggested it would. Thus, even a marginal increase in deterrence is a 
likely benefit of the rule, although not its primary benefit.
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    \147\ See Microsoft Cmt.; Apple Cmt.
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    Some rough math may help illustrate these qualitatively described 
benefits: Between January 1, 2018, and June 30, 2022, Consumer Sentinel 
received 338,393 complaints regarding business or government 
impersonation scams that expressly reported the initial contact method 
used by the impersonator as being email, social media, online or pop-up 
advertisement, website, or mobile application.\148\ These complaints 
referenced aggregate consumer losses of $599,270,000. Because these 
initial contact methods typically are unlikely to be covered by the TSR 
or other rules, the Commission currently cannot redress such fraud 
other than by using its Section 19 authority. The Commission cannot 
predict the volume of future government and business impersonation scam 
complaints, their contact methods, or the losses those complaints will 
report, but if even a small percentage of similar complaints the 
Commission receives in the future are redressed or deterred by the 
proposed rule, the marginal effect from rule implementation (relative 
to not implementing the rule) would have had economically significant 
consequences. For example, assume that the annualized rate of consumer 
injury from government and business impersonation scams initiated 
through email, social media, online or pop-up advertisements, websites, 
or mobile applications over the past 4.5 years is $133,171,000 (or 
$599,270,000 divided by 4.5 years). If that annualized rate continues 
over the next 10 years, consumer losses over that period would be 
$1,331,710,000. Even a five per cent reduction in such losses through 
redress or deterrence would result in a benefit to consumers of over 
$66.5 million (without adjusting for inflation or discounting any of 
these figures).
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    \148\ This is a conservative estimate of the number of Consumer 
Sentinel complaints received over this period that reference such 
initial contact methods. Complaints referencing a sub-category of 
business complaints, related to ``technical support'' scams, are 
excluded because such complaints may also be reported under business 
impersonations and because many were submitted to Consumer Sentinel 
from the impersonated business with the initial contact method 
information omitted.
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    One potentially reasonable alternative to the proposed rule is to 
terminate the rulemaking and rely instead on the existing tools that 
the Commission currently possesses to combat government and business 
impersonation fraud, such as consumer education and enforcement actions 
brought under Sections 5 and 19 of the FTC Act. Termination of the 
rulemaking would offer the benefit of preserving some Commission 
resources that would be required to continue the rulemaking in the 
short term, but it would come at a significant cost. The cost that is 
most significant is the failure to strengthen the set of tools 
available in support of the Commission's enforcement program against 
impersonation fraud, depriving it of the benefits outlined above. The 
alternative of terminating the rulemaking would not sufficiently 
accomplish the Commission's objectives. The Commission seeks comment on 
this and other potentially reasonable alternatives.

B. Paperwork Reduction Act

    In addition to the requirements of Section 22, the Commission must 
provide in any NPRM the ``information required by the Regulatory 
Flexibility Act, 5 U.S.C. 601-612, and the Paperwork Reduction Act, 44 
U.S.C. 3501-3520, if applicable.'' 16 CFR 1.11(c)(4).
    The Paperwork Reduction Act requires the Commission to engage in 
additional processes and analysis if it proposes to engage in a 
``collection of information'' as part of the proposed rule. 44 U.S.C. 
3506. The Commission states that the proposed rule contains no 
collection of information.

C. Regulatory Flexibility Act--Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act requires the Commission to prepare 
and make available for public comment an ``initial regulatory 
flexibility analysis'' (``IRFA'') in connection with any NPRM. 5 U.S.C. 
603. An IRFA requires many of the same components as Section 22 of the 
FTC Act and the Paperwork Reduction Act, which the Commission 
incorporates into its IRFA. The IRFA must furthermore contain, among 
other things, ``a description of and, where feasible, an estimate of 
the number of small entities to which the proposed rule will apply.'' 5 
U.S.C. 603(b)(3). This and other requirements do not apply, however, 
whenever ``the agency certifies that the rule will not, if promulgated, 
have a significant economic impact on a substantial number of small 
entities.'' 5 U.S.C. 605(b).
    The Commission certifies that the proposed rule will not have a 
significant economic impact on a substantial number of honest, small 
entities, and this document serves as notice to the Small Business 
Administration of the Commission's certification. Because the 
impersonation of government and businesses is already prohibited by 
Section 5 of the FTC Act, the rule does not change the state of the law 
in terms of what is legal and what is illegal.

[[Page 62750]]

Furthermore, the proposed rule would impose no recordkeeping 
requirement. The main changes arise for entities that are currently 
violating Section 5 but would, after its finalization, also be 
violating the rule: instead of being immune from civil penalties (at 
least for first offenses) and more capable of evading consumer redress, 
the violators could be ordered by a court to pay significant civil 
penalties and to provide full redress to their victims. This change 
could constitute a significant economic impact for law violators, but 
it will not affect a substantial number of small entities. The 
Commission believes that the vast majority of small entities do not 
impersonate government or other businesses. Furthermore, the Commission 
does not consider those small entities that are violating existing law 
to be among those Congress protected in enacting the additional 
procedural protections for small entities when agencies consider 
rulemaking.

V. Request for Comments

    Members of the public are invited to comment on any issues or 
concerns they believe are relevant or appropriate to the Commission's 
consideration of the proposed rule. The Commission requests that 
factual data on which the comments are based be submitted with the 
comments. In addition to the issues raised above, the Commission 
solicits public comment on the specific questions identified below. 
These questions are designed to assist the public and should not be 
construed as a limitation on the issues on which public comment may be 
submitted.

Questions

    (1) Should the Commission finalize the proposed rule as a final 
rule? Why or why not? How, if at all, should the Commission change the 
proposed rule in promulgating a final rule?
    (2) Please provide comment, including relevant data, statistics, 
consumer complaint information, or any other evidence, on each 
different provision of the proposed rule. Regarding each provision, 
please include answers to the following questions:
    (a) How prevalent is the act or practice the provision seeks to 
address?
    (b) What is the provision's impact (including any benefits and 
costs), if any, on consumers, governments, and businesses, both those 
existing and those yet to be started?
    (c) What alternative proposals should the Commission consider?
    (3) Does the proposed rule contain a collection of information?
    (4) Would the proposed rule, if promulgated, have a significant 
economic impact on a substantial number of small entities? If so, how 
could it be modified to avoid a significant economic impact on a 
substantial number of small entities?
    (5) The proposed rule contains a one-sentence prohibition against 
impersonation of government in Sec.  461.2 and another against 
impersonation of businesses in Sec.  461.3. Are these prohibitions 
clear and understandable? Are they ambiguous in any way? How if at all 
should they be improved?
    (6) The proposed rule, in Sec.  461.4, prohibits providing the 
means and instrumentalities to commit violations of Sec.  461.2 or 
Sec.  461.3. Should any final rule contain this prohibition against 
providing the means and instrumentalities for violations of the 
prohibitions against government or business impersonation? Why or why 
not?
    (7) The proposed rule, in Sec.  461.1, defines ``business'' to 
include non-profit organizations. Should any final rule keep the 
prohibition against impersonating non-profit organizations? Why or why 
not?
    (8) Should the proposed rule be expanded to address the 
impersonation of individuals or entities other than governments and 
businesses in interstate commerce? \149\ For example, should the 
proposed rule be expanded to prohibit impersonation of individuals for 
the purpose of seeking monetary payment or contribution, such as in 
romance or grandparent impersonation scams? In your answer to this 
question, please provide the following information:
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    \149\ Cf. ANPR, 86 FR 72901; see also, Emma Fletcher, Reports of 
romance scams hit record highs in 2021, FTC Data Spotlight (Feb. 10, 
2022), https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2022/02/reports-romance-scams-hit-record-highs-2021.
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    (a) How prevalent is the act or practice?
    (b) What would be the impact, including benefits and costs, of 
including individual impersonation in the proposed rule on consumers, 
governments, and businesses?
    (c) What alternative proposals should the Commission consider?

VI. Comment Submissions

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before December 16, 
2022. Write ``Impersonation NPRM, R207000'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the website https://www.regulations.gov.
    Because of the public health emergency in response to the COVID-19 
outbreak and the agency's heightened security screening, postal mail 
addressed to the Commission will be subject to delay. We strongly 
encourage you to submit your comments online through the https://www.regulations.gov website. To ensure that the Commission considers 
your online comment, please follow the instructions on the web-based 
form.
    If you file your comment on paper, write ``Impersonation NPRM, 
R207000'' on your comment and on the envelope, and mail your comment to 
the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), 
Washington, DC 20580.
    Because your comment will be placed on the public record, you are 
solely responsible for making sure that your comment does not include 
any sensitive or confidential information. In particular, your comment 
should not contain sensitive personal information, such as your or 
anyone else's Social Security number; date of birth; driver's license 
number or other state identification number or foreign country 
equivalent; passport number; financial account number; or credit or 
debit card number. You are also solely responsible for making sure your 
comment does not include any sensitive health information, such as 
medical records or other individually identifiable health information. 
In addition, your comment should not include any ``[t]rade secret or 
any commercial or financial information which . . . is privileged or 
confidential''--as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule Sec.  4.10(a)(2), 16 CFR 4.10(a)(2)--including, in 
particular, competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c). 
In particular, the written request for confidential treatment that 
accompanies the comment must include the factual and legal basis for 
the request and must identify the specific portions of the comment to 
be withheld from the public record. See FTC Rule 4.9(c). Your comment 
will be kept confidential only if the General Counsel grants your 
request in accordance with

[[Page 62751]]

the law and the public interest. Once your comment has been posted 
publicly at https://www.regulations.gov--as legally required by FTC 
Rule 4.9(b), 16 CFR 4.9(b)--we cannot redact or remove your comment, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website to read this document and the news release 
describing it. The FTC Act and other laws that the Commission 
administers permit the collection of public comments to consider and 
use in this proceeding as appropriate. The Commission will consider all 
timely and responsive public comments it receives on or before December 
16, 2022. For information on the Commission's privacy policy, including 
routine uses permitted by the Privacy Act, see https://www.ftc.gov/siteinformation/privacypolicy.

VII. Communications by Outside Parties to the Commissioners or Their 
Advisors

    Under Commission Rule 1.18(c)(1), 16 CFR 1.18(c)(1), the Commission 
has determined that communications with respect to the merits of this 
proceeding from any outside party to any Commissioner or Commissioner 
advisor will be subject to the following treatment: written 
communications and summaries or transcripts of all oral communications 
must be placed on the rulemaking record. Unless the outside party 
making an oral communication is a member of Congress, communications 
received after the close of the public-comment period are permitted 
only if advance notice is published in the Weekly Calendar and Notice 
of ``Sunshine'' Meetings.

List of Subjects in 16 CFR Part 461

    Consumer protection, Impersonation, Trade Practices.


0
For the reasons stated above, the Federal Trade Commission proposes to 
amend 16 CFR chapter I by adding part 461 to read as follows:

PART 461--RULE ON IMPERSONATION OF GOVERNMENT AND BUSINESSES

Sec.
461.1 Definitions.
461.2 Impersonation of government prohibited.
461.3 Impersonation of businesses prohibited.
461.4 Means and instrumentalities prohibited.

    Authority: 15 U.S.C. 41-58.


Sec.  461.1  Definitions.

    As used in this part:
    Business means a corporation, partnership, association, or any 
other entity that provides goods or services, including not-for-profit 
entities.
    Government includes Federal, State, local, and tribal governments 
as well as agencies and departments thereof.
    Officer includes executives, officials, employees, and agents.


Sec.  461.2  Impersonation of government prohibited.

    It is unlawful to falsely pose as or to misrepresent, directly or 
by implication, affiliation with, including endorsement or sponsorship 
by, a government entity or officer thereof.


Sec.  461.3  Impersonation of businesses prohibited.

    It is unlawful to falsely pose as or to misrepresent, directly or 
by implication, affiliation with, including endorsement or sponsorship 
by, a business or officer thereof.


Sec.  461.4  Means and instrumentalities prohibited.

    It is unlawful to provide the means and instrumentalities for a 
violation of Sec.  461.2 or Sec.  461.3.

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2022-21289 Filed 10-14-22; 8:45 am]
BILLING CODE 6750-01-P