Federal Register, Volume 89 Issue 42 (Friday, March 1, 2024)

[Federal Register Volume 89, Number 42 (Friday, March 1, 2024)]
[Rules and Regulations]
[Pages 15017-15031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04335]

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FEDERAL TRADE COMMISSION

16 CFR Part 461

RIN 3084-AB71

Trade Regulation Rule on Impersonation of Government and
Businesses

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: This final rule prohibits the impersonation of government,
businesses, and their officials or agents in interstate commerce. This
document contains the text of the final rule and the rule's Statement
of Basis and Purpose (``SBP''), including a Regulatory Analysis.

DATES: This rule is effective April 1, 2024.

FOR FURTHER INFORMATION CONTACT: Christopher E. Brown (202-326-2825),
Attorney, Division of Marketing Practices, Bureau of Consumer
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background

A. Advance Notice of Proposed Rulemaking

On December 23, 2021, the Federal Trade Commission (``Commission''
or ``FTC'') published an advance notice of proposed rulemaking
(``ANPR'') to address certain deceptive or unfair acts or practices of
impersonation.\1\ As part of the ANPR, the Commission requested comment
on any issues or concerns relevant or appropriate to this rulemaking to
combat impersonation of governments, businesses, or their agents, and
whether and how to proceed with a notice of proposed rulemaking
(``NPRM'').\2\ The Commission took comments for 60 days, and received
164 comments from representatives from a broad spectrum of businesses,
trade associations, government or law-enforcement organizations, and
individual consumers, which are publicly available on this rulemaking's
docket at https://www.regulations.gov/docket/FTC-2021-0077/comments.
Commenters generally expressed support for the Commission's proceeding
with the rulemaking. They also voiced deep concerns about the
prevalence and harmfulness of both government and business
impersonation. No commenter expressed the view that the Commission
should not commence the rulemaking. Commenters also offered suggestions
for the Commission's consideration in drafting the proposed rule and
other recommendations in furtherance of the proposed rulemaking.

B. Notice of Proposed Rulemaking

Based on an extensive review of the comments received in response
to the ANPR, the Commission's own history of enforcement, and other
considerations that occurred after the ANPR's publication,\3\ the
Commission published the NPRM on October 17, 2022.\4\ In the

[[Page 15018]]

NPRM, the Commission stated it has reason to believe impersonation of
government, businesses, and their officials or agents is prevalent.\5\
The Commission identified no disputed issues of material fact based on
the comment record; explained its considerations in developing the
proposed rule; solicited additional public comment thereon, including
posing specific questions designed to assist the public in submitting
comment; and provided interested parties the opportunity to request to
present their position orally at an informal hearing.\6\ Finally, the
NPRM set out the Commission's proposed rule.
In response to the NPRM, the Commission received 78 comments from
entities and individuals interested in the proposed rule, discussed in
Section III.\7\ Although some raised concerns and recommended specific
modifications or additions to the Commission's proposal, the majority
generally supported the rule proposed in the NPRM. Two commenters
timely submitted requests for interested parties to make an oral
statement at an informal hearing.\8\

C. Notice of Informal Public Hearing

On March 30, 2023, the Commission published an Initial Notice of
Informal Hearing (``Notice of Hearing'').\9\ The Notice designated the
Commission's Chief Administrative Law Judge, D. Michael Chappell, to
serve as the presiding officer of the informal hearing and stated that
any member of the public wishing to speak at the informal hearing or
make a documentary submission to be placed on the public rulemaking
record (or both) should submit a comment on or before April 14,
2023.\10\
On May 4, 2023, Chief Judge Chappell presided over the informal
hearing using video conferencing, which enabled the public to watch
live from the Commission's website, https://www.ftc.gov. Because there
were no disputed issues of material fact to resolve, the informal
hearing included no cross examination or rebuttal submissions, and the
presiding officer made no recommended decision. The informal hearing
included oral statements from 14 interested parties.\11\ The majority
of commenters who presented oral statements at the informal hearing or
filed documentary submissions generally expressed strong support for
the Commission's proposed rule.\12\ Several commenters, however, also
expressed concern that the proposed rule language does not explain the
circumstances under which the Commission would apply proposed Sec.
461.4, which would prohibit providing the means and instrumentalities
to commit violations of government and business impersonation. Some
suggested alternative language imposing a scienter requirement to
narrow the scope of this provision, discussed in Section III.D.
In crafting the final rule, the Commission has carefully considered
the comments received in response to the NPRM and on the rulemaking
record, which includes the oral statements and documentary submissions
in response to the Notice of Hearing. The final rule contains some
changes from the proposed rule. These modifications, discussed in
detail in Section III, are based upon input from commenters and careful
consideration of relevant law. Section III also discusses commenters'
recommendations that the Commission declined to adopt, along with the
Commission's reasons for rejecting them. Accordingly, the Commission
adopts the proposed rule with limited modifications as discussed below.
The rule will take effect April 1, 2024.

II. The Legal Standard for Promulgating the Rule

The Commission is promulgating 16 CFR part 461 pursuant to section
18 of the FTC Act, 15 U.S.C. 57a, the Administrative Procedure Act
(``APA''), and Part 1, subpart B of the Commission's Rules of
Practice.\13\ This authority permits the Commission to promulgate,
modify, and 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 Commission's Rules of Practice further provide that if the
Commission determines to promulgate a rule, it will adopt a SBP, which
must address three factors: (1) The prevalence of the acts or practices
addressed by the rule; (2) the manner and context in which the acts or
practices are unfair or deceptive; and (3) the economic effect of the
rule, taking into account the effect on small businesses and
consumers.\14\ In this section of the preamble, the Commission
summarizes its findings regarding each of these factors.

A. Prevalence of Acts or Practices Addressed by the Rule

In its ANPR, the Commission cited public data from the Consumer
Sentinel Network database and described its enforcement record,
demonstrating government and business impersonation scams are not only
highly prevalent but increasingly harmful.\15\ In the NPRM, the
Commission also took notice of additional indications of prevalence
that came after the ANPR's publication.\16\ Specifically, the NPRM
cited data from a broad spectrum of commenters (businesses, trade
associations, and government or law-enforcement organizations)
regarding the prevalence of government and business impersonation
scams, which echoed the Commission's findings that these schemes are
among the most common deceptive or unfair practices affecting U.S.
consumers and businesses and continue to be a significant source of
consumer injury.\17\

B. Manner and Context in Which the Acts or Practices Are Deceptive or
Unfair

A representation, omission, or practice is deceptive if it is
material and likely to mislead a consumer acting reasonably under the
circumstances.\18\ The most frequent allegations in the Commission's
enforcement actions involving government and business impersonation
pertain to defendants tricking consumers to pay money or disclose
personal information by making, expressly or by implication, statements
that misrepresent the defendants' identity.\19\ Nearly as frequent are
allegations of misrepresentations concerning defendants' affiliation
with, endorsement or approval by, or other association with a
government or business. The Commission has further found false threats
of severe consequences and promises of benefits are additional
deceptive tactics deployed by government and business impersonators. In
the Commission's experience, such claims regarding identity,
affiliation, or endorsement are material to consumers making their
decision to trust impersonators. The numerous government and business
impersonation complaints consumers submit to the Commission each year,
as well as comments submitted in connection with this rulemaking
proceeding, consistently reference these same concerns. Accordingly,
the specific practices described in the preamble to the proposed rule
reflect the type of conduct most commonly associated with deceptive and
unfair practices pertaining to government and business
impersonation.\20\

C. The Economic Effect of the Rule

As part of the rulemaking proceeding, the Commission solicited
comment and data (both qualitative and quantitative) on the economic
impact of the proposed rule and its costs and benefits.²¹ In

[[Page 15019]]

issuing the final rule, the Commission has carefully considered the
comments received and the costs and benefits of each provision, as
discussed in more detail below in Section VI. The record demonstrates
the most significant anticipated benefit of the final rule is the
Commission's ability to obtain monetary relief. This is particularly
critical because that ability was curtailed by the U.S. Supreme Court's
decision in AMG Cap. Mgmt., LLC v. FTC, which holds that equitable
monetary relief, including consumer redress, is not available under
section 13(b) of the FTC Act.²² Further, obtaining monetary
relief based on violations of the final rule under section 19(b) of the
FTC Act will be significantly faster than obtaining such relief under
section 19(a)(2) without a rule violation.²³ By enabling the
Commission to obtain monetary relief more efficiently, the final rule
would also reduce the expenditure of Commission resources.²⁴
As an additional benefit, the rule enables the Commission to obtain
civil penalties against violators.²⁵ The final rule also
provides a benefit to businesses through increased deterrence of
business impersonators, which reduces businesses' expenditure of
resources associated with monitoring for and addressing
impersonation.²⁶ Moreover, as the record and the
Commission's law enforcement experience demonstrate, the final rule is
unlikely to impose costs on any honest business, and may increase
deterrence of impersonation scams, which would benefit consumers
through a reduction in their total financial losses from these
schemes.²⁷

III. Response to Comments

The Commission received 78 comments in response to the NPRM from a
diverse group of individuals, industry groups and trade associations,
consumer organizations, and government agencies.²⁸ The
Commission received 28 comments in response to the Notice of Hearing,
including oral presentations from 14 commenters.²⁹
Commenters generally supported the proposed rule, recognizing the
Commission's authority to protect consumers from the increasing number
of government and business impersonation frauds targeting consumers.
In the NPRM, the Commission invited comment on any issues or
concerns the public believes are relevant or appropriate to the
Commission's consideration of the proposed rule.³⁰ The NPRM
also posed eight specific questions for the public.³¹ Some
of these questions relate to the Paperwork Reduction Act (``PRA'') and
Regulatory Flexibility Act (``RFA''), and are addressed in Sections V
and VI, respectively.³² The other questions, along with
common issues or concerns relevant to the Commission's consideration of
the proposed rule outside of the specific questions, are addressed in
this section of the preamble.

A. Finalizing the Proposed Rule as a Final Rule

In Question 1 of the NPRM, the Commission asked whether it should
finalize the proposed rule as a final rule, and how, if at all, it
should change the proposed rule in promulgating the final
rule.³³ The majority of commenters did not express a clear
view regarding whether the Commission should adopt the proposed rule as
final. Many of these commenters, however, did share their experience
regarding the prevalence and harmfulness of various kinds of government
and business impersonation frauds.³⁴ Some of these
commenters complained more generally about various non-impersonation
scams.³⁵ The majority of commenters that addressed Question
1 of the NPRM were substantially supportive of the proposed rule, but
stopped short of urging the Commission to finalize the text of the
proposed rule without modification. These commenters typically
recommended either broadening or narrowing the scope or text of the
rule in response to other specific questions asked in the NPRM or
relevant to the Commission's consideration of the proposed
rule.³⁶
Six commenters explicitly addressed the Commission's question
regarding finalizing the proposed rule as a final rule, and without
recommending additional modifications to the text of the proposed rule,
urged the Commission to do so.³⁷ Some of these commenters
stated the proposed rule is in the public interest because it would
allow for civil penalties against government and business
impersonators, provide redress for victims of impersonation scams, and
deter future bad acts.³⁸
Several government agencies and trade associations explained how
the proposed rule would benefit them, their members, or the people they
serve. The United States Patent and Trademark Office (``USPTO'')
described its experience of agency impersonation, and stated that
reliance on the FTC's enforcement capabilities through such a rule
would allow the USPTO to conserve and allocate its resources to
different enforcement efforts that impact the USPTO and its
stakeholders.³⁹ Similarly, the Marine Retailers Association
of the Americas (``MRAA''), a trade association representing marine
retailers, argued the benefits associated with finalizing the proposed
rule would reduce the financial burden on businesses and improve trust
among consumers.⁴⁰ The United States Copyright Office
(``USCO'') expressed support for finalizing the proposed rule, arguing
that doing so would allow the Commission to move more quickly to put a
stop to impersonation scams.⁴¹ The USPTO and the USCO
explained they do not have law enforcement authority to remedy the
harms resulting from bad actors impersonating the agencies, and USCO
argued the proposed rule would foster public trust in the copyright
system.⁴² The Cellular Telecommunications and internet
Association (``CTIA''), a trade association for wireless service
providers, argued in favor of finalizing the proposed rule because its
scope is ``targeted and judicious,'' and appropriately focused on the
bad actors that harm consumers.⁴³
Somos, Inc., which manages registry databases for the
telecommunications industry, stated it ``strongly supports the
Commission's proposed rules,'' but suggested the Commission explicitly
clarify that spoofing a telephone number of a business or government
entity to aid in that impersonation violates the rule.⁴⁴ The
Commission is not persuaded that explicitly stating telephone spoofing,
or any specific type of government or business impersonation,
constitutes a violation of the rule is necessary.⁴⁵
Moreover, the Telemarketing Sales Rule (``TSR'') already bars
telemarketers from ``failing to transmit. . .the telephone number and.
. .the name of the telemarketer to any caller identification service in
use by a recipient of a telemarketing call.'' ⁴⁶ By
definition, a spoofed telephone number is not the number of the
telemarketer, and the Commission can rely on this prohibition to bring
an enforcement action for violation of the TSR against a telemarketer
that uses a spoofed number.
The Commission also received several comments that identified the
lack of access to accurate information concerning domain name
registrants (commonly known as ``WHOIS'' data) as a significant
impediment to combatting the use of domain names to impersonate
government and businesses.⁴⁷ These commenters expressed
support for expanding the text or scope of the final rule to address
this issue.⁴⁸ In particular, a few commenters urged the
Commission to issue a final rule that requires domain name registrars
to

[[Page 15020]]

collect, verify, maintain, and disclose accurate WHOIS data to the FTC
and third-party victims on request for such information based on
credible evidence of impersonation fraud.⁴⁹ The Coalition
for Online Accountability (``COA''), a group advocating for online
transparency and accountability, argued ``[t]here is no justification
for the redaction of data of legal person registrants or the
overwhelming denial of reasonable access to personal WHOIS data for
legitimate third-party interests. . ..'' ⁵⁰ Both the
Messaging Malware Mobile Anti-Abuse Working Group (``M3AAWG'') and the
Anti-Phishing Working Group (``APWG'') also suggested the Commission
encourage Domain Name System (``DNS'') registries and registrars to
engage in DNS mitigation and frequently impersonated entities to
participate as ``trusted notifiers'' to address fraudulently registered
domain names.⁵¹
The Commission declines to adopt commenters' suggestion that the
final rule expressly reference in accompanying examples the use of
domain names in impersonation schemes. Rather, the Commission here
repeats what it previously stated in the NPRM and earlier in this SBP,
that the following list of examples of conduct covered by the
prohibition on the impersonation of government and businesses was
intended to be illustrative, not exhaustive: (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 ``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; (6) using a government seal on
a building, letterhead, website, email, vehicle, or other physical or
digital place; (7) 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''; (8) sending physical mail through any carrier using
addresses, seals, logos, or other identifying insignia of a business or
officer thereof; (9) 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''; (10) creating or spoofing an email
address that impersonates a business; (11) placing advertisements that
pose as a business or officer thereof against search queries for
business services; and (12) using, without authorization, a business's
mark on a building, letterhead, website, email, vehicle, or other
physical or digital place.⁵² Accordingly, the Commission
finds the final rule is drafted with sufficient clarity and flexibility
to address the unauthorized use of internet identifiers, including but
not limited to domain names.
Only one commenter suggested in response to Question 1 of the NPRM
that the proposed rule should not be finalized.⁵³ The
Americans for Prosperity Foundation (``AFPF''), a 501(c)(3) nonpartisan
education organization, argued the Commission should ``abandon its
Section 18 rulemaking ambitions, instead refocusing its efforts on
case-by-case enforcement actions in federal court in cases involving
concrete harm to consumers.'' ⁵⁴
The Commission disagrees with the AFPF's suggestion that the
section 18 rulemaking process is too difficult or unwieldy to address
many of the unfair or deceptive acts or practices prevalent in
commerce. In 1975, Congress passed the Magnuson-Moss Warranty--Federal
Trade Commission Improvement Act laying out specific procedures for the
promulgation of ``Trade Regulation Rules'' to protect consumers in a
dynamic and changing economic landscape.⁵⁵ The Commission's
regulations at 16 CFR part 1, subpart B, respect the underlying
statutory requirements of section 18, which provide ample transparency
and opportunity for public participation in the promulgation of Trade
Regulation Rules. The Commission intends therefore to fulfill its
mission to protect against unfair or deceptive acts or practices in or
affecting commerce and to provide consumers and businesses with due
process, clarity, and transparency while crafting the rules to do so.
Accordingly, the Commission rightfully responds to Congress's grant of
authority by initiating this rulemaking.
The AFPF also expressed various criticisms specific to the language
of the proposed rule and recommended several suggested revisions
discussed in greater detail in Sections III.C and III.D below.
Following review of all comments and careful consideration of the
relevant law, the final rule issued by the Commission contains some
minor changes from the proposed rule, as discussed in Section III.

B. Relevant Evidence Regarding Provisions of the Proposed Rule,
Prevalence, Impact and Alternative Proposals

In the ANPR, the Commission asked specific questions about the
prevalence of impersonation fraud, and requested the data source
commenters relied upon for formulating their answer(s).⁵⁶
The ANPR also asked specific questions regarding how to craft a
proposed rule to maximize the benefits to consumers and minimize the
costs to businesses, and what alternatives to regulations the
Commission should consider in addressing impersonation
frauds.⁵⁷ In Question 2 of the NPRM, the Commission posed
these same or nearly identical specific questions regarding each
different provision of the proposed rule.⁵⁸ Six commenters
specifically addressed these questions.⁵⁹ Each of these
commenters described various types of government and business
impersonation scams common to their own experience or industry in
support of their view that such frauds are highly
prevalent.⁶⁰ For example, the Toy Association noted various
business impersonation scams experienced by its members, including
counterfeit or non-compliant toys, falsified documents regarding
endorsement and affiliation related to counterfeit toys, false
solicitation and phishing schemes collecting customer information, and
domain impersonation.⁶¹ Similarly, the USPTO and USCO
described several examples of government impersonation scams involving
the trademark and copyright registration processes, respectively, and
included illustrative examples as attachments with their public
comment.⁶²
Other commenters particularly concerned with online business
impersonation cited data from studies or reports regarding trends in
these kinds of impersonation frauds, and recent examples of phishing
attacks against consumers through the impersonation of recognized
online companies in support of their arguments regarding
prevalence.⁶³ A small number of

[[Page 15021]]

commenters addressed the impact (including any benefits and costs) on
consumers, governments, and businesses, discussed in more detail in
Section VI.
Only one commenter suggested an alternative proposal for the
Commission's consideration.⁶⁴ Specifically, the M3AAWG
recommended as an alternative to the means and instrumentalities
provision in proposed Sec. 461.4 that the Commission ``identify best
practices or safe harbors to incentivize prompt mitigation efforts and
sound verification techniques'' to address the use of domain names in
business impersonation schemes.⁶⁵ M3AAWG argued this
alternative to regulation would avoid the risk of inadvertently
imposing ``secondary or intermediary liability against legitimate
businesses, technologies or services'' exploited by
impersonators.⁶⁶
Upon review of the comments received in response to Question 2 of
the NPRM, the Commission concludes such comments support its own
findings that government and business impersonation schemes are both
prevalent and harmful. The Commission declines at this time to adopt
M3AAWG's alternative proposal for Sec. 461.4. As discussed in Section
III.D, the Commission is continuing to review comments and records
relevant to the means and instrumentalities provision in proposed Sec.
461.4 to determine whether additional action or protections are
warranted and is requesting additional public comment through a SNPRM,
published elsewhere in this issue of the Federal Register.

C. Clarity of Prohibitions Against Impersonation of Government &
Businesses

In Question 5 of the NPRM, the Commission solicited comment
regarding whether the proposed rule's one-sentence prohibitions against
impersonation of government in Sec. 461.2 and against impersonation of
businesses in Sec. 461.3 are clear and unambiguous, and how, if at
all, they should be improved.⁶⁷ The Commission received
several comments that addressed this question directly ⁶⁸ or
indirectly.⁶⁹ Two commenters considered the one-sentence
prohibitions to be clear and unambiguous and/or deferred to the
Commission's construction, but suggested certain additions or
modifications.⁷⁰ For example, the USCO suggested the
Commission consider whether the definition of ``officer,'' which covers
representatives of both governments and businesses, should be
bifurcated into two separate and more specific terms to define
representatives of governments and businesses,
respectively.⁷¹ No other commenter suggested a revision to
the definitions in proposed Sec. 461.1. The USPTO suggested the
Commission broaden the exemplary ``list of matter'' used to impersonate
a government to specifically reference ``logos.'' ⁷² In
support of this recommendation, the USPTO noted ``the use of logos''
was explicitly identified in the NPRM's examples of unlawful conduct
that would be covered by the prohibition against business impersonation
in proposed Sec. 461.3, but not in the NPRM's examples of unlawful
conduct that would be covered by the prohibition of government
impersonation in proposed Sec. 461.2. The USPTO further asserted
government agencies also ``use logos in addition to official seals and
insignia,'' and provided an illustrative example of impersonators
misusing the USPTO's logo.⁷³
Three commenters indicated the language of proposed Sec. Sec.
461.2 and 461.3 was vague or provided inadequate guidance, and
warranted modification.⁷⁴ Some commenters raised
constitutional concerns based on the purported overbreadth of the one-
sentence prohibitions.⁷⁵ These commenters' constitutional
arguments addressed two primary considerations: (1) whether the
proposed rule provides due process notice; ⁷⁶ and (2)
whether it encroaches upon free speech protected under the First
Amendment.⁷⁷ The AFPF stated the proposed rule is an ``open-
ended regulation,'' arguing it ``fails to provide constitutionally
adequate notice of required or prohibited conduct'' and otherwise falls
short of section 18's specificity requirements.⁷⁸ Other
commenters wary of inadvertent intrusions on protected speech asserted
any final prohibition should exempt innocent behavior such as parody
⁷⁹ and non-commercial or otherwise legitimate
speech.⁸⁰
In his documentary submission in response to the Notice of Informal
Hearing, William MacLeod echoed concerns he previously expressed in
response to the NPRM that the language in proposed Sec. Sec. 461.2 and
461.3 ``depart[s] from the standards of deception that the Commission
applies under Section 5.'' ⁸¹ MacLeod noted that: ``[i]ts
terms do not include `deception' or `fraud' or critical elements of the
FTC's deception policy statement.'' ⁸² He raised additional
concerns about ``impersonations and affiliations [that] can be false,
but also unbelievable.'' ⁸³ MacLeod argued that the
prohibitions, as written, are too broad and would proscribe non-
deceptive acts or practices, such as ``fictional depictions'' in
television advertisements.⁸⁴
Raising First Amendment concerns, the AFPF similarly asserted that
the proposed rule's ``falsely pose as'' language, ``read literally,''
would impose civil penalties on ``utterly innocuous conduct'' and
``would appear to make it unlawful for anyone to dress up as an FTC
Commissioner, politicians, or . . . a Microsoft executive and attend a
Halloween party.'' ⁸⁵ It also expressed concern that the
proposed prohibitions did not require ``materiality,'' ``consumer
harm,'' or ``connection to interstate commerce.'' ⁸⁶ Several
commenters suggested alternative language to cure what they perceived
to be the overbreadth of the prohibition provisions. For example,
M3AAWG recommended that the final rule adopt a definition of
``impersonation'' that mirrors the definition of ``criminal
impersonation'' in 18 U.S.C. Chapter 43.⁸⁷ M3AAWG asserted
that such a definition would narrow the scope of the rule to cover only
those bad actors with ``clear intent and specific knowledge'' of
prohibited acts.
MacLeod proposed narrowing the focus of the final rule by adopting
language that specifies particular prohibited practices or the mens rea
of its intended targets.⁸⁸ The AFPF agreed with MacLeod and
suggested that the Commission revise the proposed rule to ``explicitly
incorporate Section 5's statutory prohibition . . . [and] requirements
set forth in the Commission's Deception Statement.'' ⁸⁹
After analyzing and considering the comments, the Commission is
persuaded that the language of the final rule should adhere more
closely to the language of section 5 of the FTC Act to avoid any
potential confusion about the scope of the rule. The Commission
believes that these revisions sufficiently address some commenters'
concerns that the language of the proposed rule put it in conflict with
Due Process requirements and the First Amendment.
The Commission emphasizes that it does not intend for the final
rule to regulate non-commercial speech. To adhere more closely to the
language of section 5 of the FTC Act and case law, the Commission has
revised the final regulatory text to incorporate relevant language from
section 5. Specifically, the Commission has replaced ``unlawful'' with
``unfair or deceptive act or practice,'' and added ``materially'' and
``in or affecting commerce'' in Sec. Sec. 461.2 and 461.3. These
changes make it abundantly clear that the scope of the final regulatory
text is coterminous with the scope of the FTC's authority under

[[Page 15022]]

the FTC Act, and they clearly specify the misconduct prohibited by the
final rule. Accordingly, false impersonations or misrepresentations
that are not material to a commercial transaction, such as
impersonation in purely artistic or recreational costumery or
impersonation in connection with political or other non-commercial
speech, are not covered by the final rule.
The Commission concludes that it is unnecessary to divide the
definition of ``officer'' into two separate terms as suggested by the
USCO. Section 461.1 defines ``officer'' to ``include[ ] executives,
officials, employees, and agents,'' which the Commission believes
appropriately describes and covers both government and business
representatives.
As previously stated, the NPRM's list of examples of prohibited
conduct covered by the rule is intended to be illustrative, not
exhaustive, and therefore, the Commission declines to adopt the USPTO's
suggestion that it enlarge that exemplary ``list of matter.'' Rather,
the Commission maintains that not including specific prohibitions in
the regulatory text provides it with sufficient flexibility to address
the many types of ``matter'' (including objects, items, logos,
insignia, etc.) used to impersonate governments and businesses alike,
which are too numerous to list.
The Commission declines to adopt a definition of ``impersonation''
that reflects a criminal regulatory scheme as proposed by M3AAWG. The
FTC Act does not include a mens rea requirement, and there is no
evidence in the record that the imposition of such a requirement is
warranted. Furthermore, while intent is not required under the rule or
the FTC Act, in any action seeking civil penalties for violation of the
rule, the Commission will need to establish ``actual knowledge or
knowledge fairly implied on the basis of objective circumstances that
such act is unfair or deceptive and is prohibited by such rule.''
⁹⁰
The Commission rejects the recommendation by both MacLeod and AFPF
to incorporate the FTC Deception Policy Statement into the final rule.
Nevertheless, as discussed earlier in this Section III.C, informed by
MacLeod's and AFPF's comments, the Commission has revised the
regulatory text of Sec. Sec. 461.2 and 461.3 to mirror the language of
section 5 of the FTC Act more closely. In particular, the reference to
``unfair or deceptive act or practice,'' and the inclusion of
materiality and interstate commerce requirements should address
commenters' concerns that this rule might be read to cover
impersonation in connection with artistic costumery, parody, or other
non-commercial speech.⁹¹ The Commission further notes that,
by the terms of these sections, a court must find that the alleged
defendant made an express or implied misrepresentation regarding
material information for Sec. Sec. 461.2 and 461.3 to be violated. For
an express or implied misrepresentation regarding material information
to be made in violation of the FTC Act and this rule, there must be a
representation that misleads consumers acting reasonably under the
circumstances regarding material information. Thus, while the
Commission rejects the recommendation by both MacLeod and AFPF to
incorporate the FTC Deception Policy Statement into the final rule, by
incorporating the changes above, the Commission has ensured that the
final rule is consistent with the Deception Policy Statement, is
consistent with other relevant Commission rules, and provides further
specificity regarding the prohibited acts and practices under section 5
of the FTC Act.

D. Prohibition Against Providing Means and Instrumentalities

In Question 6 of the NPRM, the Commission asked whether the final
rule should contain the prohibition in proposed Sec. 461.4 against
providing the means and instrumentalities for violations against
government or business impersonation. The Commission received more than
20 comments that expressly addressed this question.⁹² Many
of the sentiments reflected in these comments were also echoed by
several commenters that presented oral statements in response to the
Notice of Informal Hearing.⁹³A few commenters arguing for
the importance of holding intermediaries accountable for enabling or
promoting impersonation schemes encouraged the Commission to finalize
the text of the proposed provision without modification.⁹⁴
These commenters specifically argued that finalizing the proposed Sec.
461.4 could help to combat impersonation schemes perpetrated by
foreign-based scammers--beyond U.S. court jurisdiction--that obtain
services from U.S.-based instrumentalities, such as payment processors
and internet service providers.⁹⁵
Addressing means and instrumentality liability, both the AFPF and
MacLeod reiterated their concerns referenced in Section III.C,
regarding section 18's specificity requirements, due process notice,
free speech, and conformity to the FTC's Deception Policy
Statement.⁹⁶ Most commenters who addressed Question 6
expressed support for means and instrumentalities liability, but with
some concern or suggested modifications. Some supportive commenters
cautioned that the proposed means and instrumentalities provision could
be read too broadly.⁹⁷ Others expressed the concern that
without a specific scienter or knowledge requirement, the proposed rule
provision runs the risk of imposing strict liability against innocent
and unwitting third-party providers of services or
products.⁹⁸ Accordingly, several commenters urged the
Commission to clarify the scope of means and instrumentalities
liability or explicitly include a specific knowledge requirement in the
final rule provision.⁹⁹
For example, the Consumer Technology Association (``CTA''), a trade
association representing the U.S. consumer technology industry, stated
that the Commission's explanation and examples of the ``means and
instrumentalities'' provision in the NPRM seem to limit its
applicability, but such limitation ``is not squarely reflected in the
text of the proposed rule.'' ¹⁰⁰ The CTA therefore urged the
FTC to clarify that ``means and instrumentalities'' liability applies
only ``to entities that have knowledge or consciously avoid knowing
that they are making representations being used to commit impersonation
fraud.'' USTelecom, a trade association representing the broadband
technology industry, argued that a discrepancy exists between the case
law, the NPRM's discussion of means and instrumentality liability, and
the proposed rule provision. It urged the Commission to ``adjust the
proposed language in Sec. 461.4 to codify the requirement that the
person has knowledge or reason to expect it is providing the means and
instrumentalities . . .'' (emphasis in original).¹⁰¹
Similarly, the American Bar Association Section of Intellectual
Property Law suggested that the Commission ``explicitly include [in
Sec. 461.4] the language referenced in the [NPRM] from Shell Oil Co.,
128 F.T.C. 749 (1999)--acting with `knowledge or reason to expect that
consumers may possibly be deceived as a result.' '' ¹⁰²
Other commenters argued that inclusion of a scienter requirement is
a necessary but not sufficient modification of the proposed language to
impose means and instrumentalities liability. For example, the internet
& Television Association (``NCTA''), a trade association for the United
States cable television industry, argued that such ``liability requires
both providing deceptive means and instrumentalities, e.g., providing
false or misleading

[[Page 15023]]

claims or counterfeit items, and actual knowledge that the deceptive
representations or goods will be used to commit impersonation
violations'' (emphasis in original).¹⁰³ Likewise, M3AAWG
advocated that, in addition to a ``knowledge or reason-to-know test,''
primary liability under a revised Sec. 461.4 should also require that
the provision of such means and instrumentalities be done willfully or
in bad faith, and with clear intent and specific
knowledge.¹⁰⁴
A few commenters urged the Commission to adopt a final rule that
explicitly recognizes specific or defined ``means and instrumentality''
violations perpetrated in connection with impersonation frauds, such as
the use of legal process documents ¹⁰⁵ or manipulated media
technologies (i.e., deepfakes) ¹⁰⁶ or failure to disclose
WHOIS data.¹⁰⁷
Based upon the comments received on the proposed provision
regarding means and instrumentalities, the Commission has decided that
this specific provision warrants further analysis and consideration;
thus, the Commission has decided not to finalize proposed Sec. 461.4.
The Commission is not aware of any other rule, whether issued pursuant
to section 18 or APA rulemaking authority, that identifies a means and
instrumentalities violation. The Commission notes that it has used
means and instrumentalities allegations as a type of deception to
establish primary liability in the absence of privity between the
defendant and the deceived persons, albeit rarely, in connection with
matters that involve impersonation.¹⁰⁸ Pending further
analysis and consideration, the Commission declines to adopt proposed
Sec. 461.4 at this time. The Commission is still considering the
provision regarding means and instrumentalities, as well as issues
related to the impersonation of individuals or entities other than
governments and business in interstate commerce and is requesting
public comment through a Supplemental Notice of Proposed Rulemaking
(``SNPRM''), published elsewhere in this issue of the Federal Register.

E. Inclusion of Prohibition Against Impersonating Nonprofits

In response to the ANPR, the Commission received a number of
comments that urged the Commission to include ``nonprofit'' entities in
the proposed rule's definition of businesses that can be
impersonated.¹⁰⁹ The Commission agreed with these comments,
and consequently, defined a ``business'' that may be impersonated to
include nonprofits in Sec. 461.1 of the proposed rule, notwithstanding
the fact that the Commission is authorized to sue a corporation only
when the corporation is ``organized to carry on business for its own
profit or that of its members.'' ¹¹⁰ As the Commission
explained in the NPRM, the reason for doing so is because for profit
businesses may impersonate nonprofit business.¹¹¹ In
Question 7 of the NPRM, the Commission solicited comment regarding
whether any final rule should keep the prohibition against
impersonating nonprofit organizations.¹¹² The Commission
received more than a dozen comments that specifically addressed this
question, and each of them expressed support for a final rule keeping
the prohibition against impersonating nonprofits.¹¹³ None of
the comments responding to the NPRM or Notice of Hearing opposed doing
so. The vast majority of commenters who addressed this question were
themselves nonprofit organizations operating as trade associations, and
referenced their own experience with impersonation frauds in support of
a final rule keeping the prohibition against impersonating
nonprofits.¹¹⁴ Several commenters expressed the view that
nonprofits are often the subject of impersonation scams in the same way
as for profit businesses and government agencies.¹¹⁵ Other
commenters asserted that impersonation of nonprofits could be uniquely
harmful because bad actors ``prey[ ] on the goodwill of individuals
attempting to make donations, and misappropriate[ ] those donations to
corrupt private actions.'' ¹¹⁶ Some commenters noted that
nonprofits are particularly susceptible to being impersonated in scams
involving affiliation or endorsement claims because nonprofits often
offer awards or seals of approval.¹¹⁷
Finally, two commenters cited trademark law in support of keeping
nonprofits in the definition of business and a final rule that includes
the prohibition against impersonating nonprofits. Specifically, both
INTA and the Toy Association stated that trademark law has ``long
recognized that the misuse of names of non-profit organizations can
lead to harmful consumer confusion.'' ¹¹⁸ In INTA's and the
Toy Association's view, the same applies with respect to impersonation
schemes; thus, the final rule should also make no distinction between
for profit and nonprofit businesses.
Based upon the record, including public comments in response to
Question 7 of the NPRM, the Commission has determined that the final
rule will retain the definition of ``business'' in Sec. 461.1 that
includes nonprofits and the prohibition against impersonating nonprofit
organizations in Sec. 461.3.

F. Inclusion of Individuals or Entities Other Than Government and
Business Impersonators

In the NPRM, the Commission asked whether the proposed rule should
be expanded to address the impersonation of individuals or entities
other than governments and business in interstate
commerce.¹¹⁹ The NPRM identified romance and grandparent
impersonation scams as illustrative, but non-exhaustive, examples of
other types of impersonation fraud, and solicited further comment
regarding their prevalence and impact, and alternative proposals to
regulation. Six commenters specifically addressed these questions, and
each of them stated that the Commission should expand the reach of the
proposed rule to extend beyond government and business
impersonators.¹²⁰ Some commenters asserted that fraudsters
often impersonate individuals in similar ways they impersonate
government and businesses.¹²¹ In support of expanding the
rule, several commenters argued that romance and grandparent
impersonation scams were harmful and prevalent, citing to data from the
FTC and other sources showing a steady increase in the number of
consumer reports and median individual losses for such
scams.¹²² A comment submitted by a group of students at
Rutgers Law School asserted that older consumers are susceptible to
``interpersonal confidence fraud and romance scams'' and provided
relevant data demonstrating that older consumers may be more likely to
fall victim to these kinds of impersonation than to government
impersonation.¹²³ Several commenters also stated that while
the number of reports of these two types of impersonation scams are not
as high as government and business impersonation, they are likely
underreported, and that median individual losses are often
higher.¹²⁴ The AARP stated that, ``[o]f all fraud activity,
romance scams and scams impersonating a family member in trouble are
the most insidious, given the emotional devastation that combines with
often significant financial losses.'' ¹²⁵ A joint comment
submitted by several consumer and privacy advocacy organizations argued
that such evidence ``should be sufficient justification'' for the
Commission to ``add a subsection to proposed Section 461 to cover
`Impersonation of Individuals.' '' ¹²⁶

[[Page 15024]]

A few commenters discussed the prevalence and harmfulness of other
kinds of impersonation scams as support for expanding the rule beyond
government and businesses to include individuals. For example, the NCTA
stated that its member companies had observed an increase in
sophisticated residential IP address scams that impersonate online
subscribers for illegal purposes such as piracy and
fraud.¹²⁷ NCTA encouraged the Commission to consider a new
rule to prohibit impersonation of individuals through ``unauthorized
use of an individual's online credentials, accounts, IP addresses, and
digital networks.'' ¹²⁸ The Recording Industry Association
of America (``RIAA'') described impersonation scams involving offers of
NFTs and mobile apps suggesting affiliation with sound recording
artists and phishing scams where third parties claimed to be a music
artist's manager or producer.¹²⁹ RIAA recommended that the
Commission expand the rule to include the following: ``[I]t [is]
unlawful to falsely pose as or to misrepresent, directly or by
implication, affiliation with, including endorsement or sponsorship by,
an individual, for financial gain.'' ¹³⁰
The Rutgers Law Students noted the prevalence of social media, and
profiles of celebrities and influencers in current modes of online
communication, arguing that it would be a ``grave oversight'' to omit
persons with such notable identities from a rule prohibiting
impersonation.¹³¹ The students also argued that individuals
are more likely than government agencies or businesses to suffer direct
harm to their identities from impersonation scams and less likely to be
able to repair the reputational injuries.¹³² Accordingly,
they proposed that the Commission add another section to the rule with
language prohibiting the impersonation of ``any person'' that parallels
the language in Sec. Sec. 461.2 and 461.3 prohibiting the
impersonation of government and businesses, respectively.¹³³
The students further stated that this additional provision ``closes a
loophole'' that proposed Sec. Sec. 461.2 and 461.3 leave open
regarding the impersonation of former government and business
officials.¹³⁴ Finally, the students concluded that adding
such a narrowly drafted provision would not burden honest businesses or
individuals, and would benefit consumers because the median individual
losses for other kinds of impersonation frauds are often greater than
for government and business impersonation.¹³⁵ Both the
students and the NCTA agreed that expanding the proposed rule to
prohibit impersonation of individuals would not impact recreational or
comedic impersonations of individuals in television or
film.¹³⁶
Upon consideration of the comments received in response to Question
8 of the NPRM and all relevant records and data, the Commission is
seeking additional public comment about potentially expanding part 461
to cover impersonation of individuals or entities other than
governments and businesses in interstate commerce in a SNPRM published
elsewhere in this issue of the Federal Register.¹³⁷

G. Requiring Domain Name Registrars To Collect, Verify, Maintain, and
Disclose Accurate WHOIS Data

The Commission received several comments that identified the lack
of access to accurate information concerning domain name registrants
(commonly known as ``WHOIS'' data) as a significant impediment to
combatting the use of domain names to impersonate government and
businesses.¹³⁸ These commenters expressed support for
expanding the text or scope of the final rule to protect consumers from
this increasingly prevalent impersonation scheme.¹³⁹ In
particular, a few commenters urged the Commission to issue a final rule
that requires domain name registrars to collect, verify, maintain, and
disclose accurate WHOIS data to the FTC and third-party victims on
request for such information based on credible evidence of
impersonation fraud.¹⁴⁰ As previously noted, the COA argued
that the redaction or denial of reasonable access to WHOIS data is
unjustified.¹⁴¹ Both M3AAWG and APWG also suggested that the
Commission encourage DNS registries or registrars to engage in DNS
mitigation and frequently impersonated entities to participate as
``trusted notifiers'' to address fraudulently registered domain
names.¹⁴²
Because the deceptive use of internet domain names is already
covered under the rule, the Commission declines to adopt commenters'
suggestion that the final rule expressly reference in the text or
accompanying examples the use of domain names in impersonation schemes.
As previously noted in Section III.A, the NPRM's preamble contained a
list of examples of conduct covered by the prohibition on the
impersonation of government and businesses that was intended to be
illustrative, not exhaustive.¹⁴³ Such a comprehensive list
would be both impossible and would not provide the trade regulation
rule with the flexibility to accommodate changes in the marketplace and
scammers' behavior. The Commission finds therefore that the final rule
is drafted with sufficient clarity and flexibility to address the
unauthorized use of internet identifiers, including but not limited to,
domain names. Furthermore, the Commission declines to issue a final
rule that imposes affirmative requirements upon domain name registrars
which is beyond the purview of this rulemaking and doing so arguably
would place an impracticable burden upon consumers to know about and
verify the trustworthiness of such WHOIS data.

H. Comments Regarding Limitation of Remedies

A small number of commenters urged the Commission to clarify that
any final rule regarding impersonation would not limit any rights and
remedies already available to businesses and consumers that have been
the subject of impersonation.¹⁴⁴ For example,
notwithstanding its support of the Commission's rulemaking to address
impersonation, the American Bar Association Section of Intellectual
Property Law asserted that many government impersonation scams should
be referred to the Department of Justice for criminal prosecution, and
therefore, cautioned that any regulatory approach ``not dilute the
impetus for a criminal law solution.'' ¹⁴⁵ Other commenters
suggested that the Commission clarify that any final rule is not
intended to limit any existing private right of action or civil
remedies.¹⁴⁶ Specifically, the Toy Association and INTA both
advocated that any final rule on impersonation not be interpreted as
limiting the rights and remedies available to trademark owners under
the Lanham Act and the Anti-Cybersquatting Consumer Protection Act.
INTA further proposed that the Commission issue a clarification that
any final rule is intended only to complement--not expand or contract--
the legal protections available to private parties under the entire
body of federal or state trademark and unfair competition
law.¹⁴⁷
By issuing the final rule regarding government and business
impersonation, the Commission does not preempt or intend to preempt
action in the same area, which is not inconsistent with this final
rule, by any federal, state, municipal, or other local government. This
final rule does not annul or diminish any rights or remedies provided
to consumers or businesses by any federal, state law, municipal
ordinance, or other local regulation, insofar as those rights or

[[Page 15025]]

remedies are equal to or greater than those provided by this final
rule.

IV. Final Rule

For the reasons described above, the Commission has determined to
adopt the provisions of proposed Sec. 461.1 as initially proposed, and
the provisions of Sec. Sec. 461.2 and 461.3 with clarifying
modifications. The Commission declines to finalize proposed Sec. 461.4
at this time.
Specifically, the Commission concludes that the proposed definition
of ``officer'' is sufficient to cover both government and business
representatives, and therefore, need not be divided into two separate
terms. Further, the final rule includes a definition of
``materially''--which has been used in other section 18 rules--to avoid
potential confusion or potential perceived conflict with non-commercial
speech. For these same reasons, the final rule replaces ``unlawful''
with ``unfair or deceptive act or practice'' and adds ``materially''
and ``in or affecting commerce'' in Sec. Sec. 461.2 and 461.3. Such
revised language further clarifies that the rule conforms to the well-
established standards for deception and unfairness under the FTC Act.
Finally, the Commission declines to finalize the proposed Sec. 461.4
provision regarding means and instrumentalities at this time because
further analysis and consideration is warranted based on the record,
including comments. The Commission is requesting additional public
comment on this provision, and on issues related to the impersonation
of individuals or entities other than governments and business in
interstate commerce, through a SNPRM, published elsewhere in this issue
of the Federal Register.

V. Paperwork Reduction Act

The Paperwork Reduction Act (``PRA''), 44 U.S.C. 3501 et seq.,
requires federal agencies to seek and obtain Office of Management and
Budget (``OMB'') approval before undertaking a collection of
information directed to ten or more persons. In Question 3 of the NPRM,
the Commission asked commenters whether the proposed rule contained a
collection of information.¹⁴⁸ No comments responding to the
NPRM or Notice of Hearing addressed this question. While the Commission
has revised the rule based on the comments it received, it has not
added any new requirements that would collect information from the
public. Accordingly, the Commission has determined that there are no
new requirements for information collection associated with this final
rule.

VI. Regulatory Analysis and Regulatory Flexibility Act Requirements

Under section 22 of the FTC Act, the Commission, when it
promulgates a final rule, must issue a ``final regulatory analysis.''
¹⁴⁹ The required contents of this final regulatory analysis
are: (1) ``a concise statement of the need for, and the objectives of,
the final rule''; (2) ``a description of any alternatives to the final
rule which were considered by the Commission''; (3) ``an analysis of
the projected benefits and any adverse economic effects and any other
effects of the final rule''; (4) ``an explanation of the reasons for
the determination of the Commission that the final rule will attain its
objectives in a manner consistent with applicable law and the reasons
the particular alternative was chosen''; and (5) ``a summary of any
significant issues raised by the comments submitted during the public
comment period in response to the preliminary regulatory analysis, and
a summary of the assessment by the Commission of such issues.''
¹⁵⁰ Additionally, the Regulatory Flexibility Act (``RFA''),
5 U.S.C. 601-612, requires an agency to provide a Final Regulatory
Flexibility Analysis (``FRFA'') with the final rule, if any, unless the
agency certifies that the rule will not have a significant economic
impact on a substantial number of small entities.¹⁵¹
The NPRM included an Initial Regulatory Flexibility Analysis
(``IRFA'') even though the Commission did not expect that the proposed
rule would have a significant economic impact on a substantial number
of small entities.¹⁵² The Commission invited public comment
on the proposed rule's effect on small entities to ensure that no
significant impact would be overlooked.¹⁵³
The FTC does not expect that the final rule will have a significant
economic impact on a substantial number of small entities, and this SBP
serves as notice to the Small Business Administration of the agency's
certification of no significant impact. The final rule imposes no
disclosure or recordkeeping requirements. As such, both the burdens
imposed on small entities and the economic impact of the final rule are
likely to be minimal, if any. Furthermore, as noted in the IRFA, the
rule does not change the law regarding the legality of government and
business impersonation, which are already prohibited by section 5 of
the FTC Act.¹⁵⁴ Although the Commission certifies the final
rule would not, if promulgated, have a significant impact on a
substantial number of small entities, the Commission has determined,
nonetheless, it is appropriate to conduct the following
FRFA,¹⁵⁵ which incorporates the Commission's initial
findings, as set forth in the NPRM,¹⁵⁶ addresses the
required contents of the final regulatory analysis, and describes the
steps the Commission has taken in the final rule to minimize its impact
on small entities.

A. Concise Statement of the Need for, and Objectives of, the Final Rule

Based upon the record, including public comments, the Commission is
implementing the rule to expand the remedies available to it to combat
government and business impersonation deception. Throughout this
rulemaking proceeding, the Commission has described how the U.S.
Supreme Court decision in AMG Cap. Mgmt., LLC v. FTC, 141 S. Ct. 1341,
1352 (2021) overturned how section 13(b) of the FTC Act had
historically been understood for 40 years to provide equitable monetary
relief, and made it significantly more difficult for the Commission to
obtain money for injured consumers.¹⁵⁷ The objective of this
final rule is to make available a shorter, faster and more efficient
path for recovery of money for injured consumers directly through
federal court action in Commission enforcement actions involving
impersonation of government or business.¹⁵⁸ Further, the
rule would deter illegal impersonation and allow for the imposition of
civil penalties, where appropriate.¹⁵⁹

B. Discussion of Significant Alternatives the Commission Considered
That Would Accomplish the Stated Objectives of the Final Rule and That
Would Minimize Any Significant Economic Impact of the Final Rule on
Small Entities

Through the NPRM, the Commission requested public comment on what
impact (including costs) will be incurred by existing and future
businesses to comply with the proposed rule, and whether the Commission
should consider alternative proposals to the proposed
rule.¹⁶⁰ This information was requested by the Commission to
minimize the final rule's burden on all businesses, including small
entities. As explained throughout this SBP, the Commission has
considered the comments and alternatives proposed by commenters and
finds the final rule will not create a significant economic impact on
small entities.¹⁶¹ Indeed, the type of deception that will
be unlawful under the final rule is already unlawful under the FTC Act,
but the final rule would allow the Commission to obtain monetary relief
more efficiently than it could solely under section 19(a)(2) of

[[Page 15026]]

the FTC Act (i.e., without a rule violation). Accordingly, the
Commission does not propose any specific small entity exemption or
other significant alternatives.

C. Summary of Significant Issues Raised by the Public Comments in
Response to the Preliminary Regulatory Analysis and IRFA

None of the comments received during the public comment period
raised any significant issues in response to the preliminary regulatory
analysis required pursuant to section 22 of the FTC Act.¹⁶²
In the IRFA, however, the Commission sought comment regarding the
impact of the proposed rule and any alternatives the Commission should
consider, with a specific focus on the effect of the rule on small
entities. In the NPRM, the Commission reiterated this request for
comment in Question 4, asking whether the proposed rule, if
promulgated, would have a significant impact on a substantial number of
small entities. Two commenters that specifically addressed the impact
of the proposed rule on small entities stated it would have a
beneficial economic impact by reducing the time and financial burden
small entities expend on fighting impersonation frauds.¹⁶³
One commenter urged the Commission not to implement a final rule that
would require third-party providers of government filing services to
include extensive disclosures in their marketing materials, arguing
such disclosure requirements could lead to small businesses declining
the offered services and falling out of compliance with government
filing obligations.¹⁶⁴ This commenter, however, did not
identify any proposed disclosure requirements that were the subject of
his concern, nor does the Commission impose any such disclosure
requirements in connection with the final rule. None of the comments
responding to the NPRM or Notice of Hearing disputed the analysis in
the IRFA. Finally, the Small Business Administration did not submit
comments.
After reviewing the public comments on the proposed rule, as
discussed throughout this SBP, the Commission concludes the final rule
will not unduly burden small entities. The Commission's explanation in
the IRFA regarding the proposed rule is true of the final rule--it only
constitutes a significant economic impact for small entities violating
existing law, which are not entitled to procedural protections when
agencies consider rulemaking.¹⁶⁵

D. Analysis of Projected Benefits and Adverse Effects of the Final Rule

In the NPRM, the Commission invited public comment and data on any
benefits and costs of proceeding with the rulemaking to inform a final
regulatory analysis.¹⁶⁶ In issuing the final rule, the
Commission has carefully considered the comments received and the costs
and benefits of each provision. As discussed throughout this SBP, the
Commission believes, and the record demonstrates, the final rule would
provide several benefits to consumers, businesses, and competition, and
help preserve agency resources, without imposing any significant
adverse effects.
The Commission's explanation in the IRFA regarding the proposed
rule is true of the final rule--it is difficult to quantify with
precision what all its benefits may be, but it is helpful to begin with
the scope of the problem the final rule would address, and then
describe the benefits qualitatively. As discussed in the NPRM, reported
consumer losses due to government impersonation topped $445 million in
2021; ¹⁶⁷ and as anticipated, remained large, and even
increased substantially, with total consumer losses of $513 million
reported in 2022 and more than $483 million for the first ten months of
2023.¹⁶⁸ Similarly, the annual consumer loss reported due to
business impersonation has increased from $453 million in 2021 to $670
million in 2022.¹⁶⁹ Accordingly, the most significant
anticipated benefit of the final rule is that it will allow the
Commission to provide monetary relief to victims of rule violations and
seek civil penalties against violators.¹⁷⁰ Furthermore, the
final rule should reduce economic harm resulting from impersonation
because its potential deterrent effects make it less likely
impersonators get to keep their ill-gotten gains and more likely they
must pay civil penalties.
The final rule also would provide the benefit of a shorter path to
obtaining consumer redress because the Commission could directly pursue
in federal court section 19 remedies in government and business
impersonation enforcement actions that do not implicate an existing
rule. The availability of more immediate consumer redress in federal
court under section 19 would allow the Commission to reduce the expense
of litigating and minimize the litigation fora and scope. The
Commission could then apply the savings of these enforcement resources
to investigating and, where the facts warrant, bringing enforcement
actions in additional impersonation matters.
The final rule also would benefit businesses whose brands are
harmed by impersonators.¹⁷¹ As several commenters have
mentioned, a final rule that would allow the Commission to bring
enforcement actions more efficiently against impersonators would save
businesses the time and other resources dedicated to monitoring and
combatting these kinds of deception.
The record is devoid of any evidence suggesting the final rule
would cause harm or adversely impact economic conditions.

E. Description and an Estimate of the Number of Small Entities to Which
the Final Rule Will Apply, or Explanation Why No Estimate Is Available

Small entities engaging in the impersonation of government and
business potentially may be found across a variety of industries and
economic sectors, but industry and sector data do not identify entities
by such conduct. Accordingly, it is not possible to estimate the number
of small entities to which the final rule will apply. However, because
the Commission finds the final rule will not impose any recordkeeping
or other compliance costs on covered entities, the Commission concludes
the final rule will not have a significant impact on a substantial
number of small entities, notwithstanding the lack of data on how many
small entities will be covered by the final rule.

F. Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Final Rule, Including an Estimate of the
Classes of Small Entities That Will Be Subject to the Requirements of
the Final Rule and the Type of Professional Skills That Will Be
Necessary To Implement the Final Rule

The final rule does not have any reporting or recordkeeping
requirements.¹⁷² As explained previously, the final rule
would apply to no small entities other than small entities violating
existing law, and therefore, no classes of small entities will be
subject to the requirements of the final rule. Finally, no professional
skills are necessary for compliance with the final rule other than
honesty and integrity.

G. An Explanation of the Reasons for the Determination of the
Commission That the Final Rule Will Attain Its Objectives in a Manner
Consistent With Applicable Law and the Reasons the Particular
Alternative Was Chosen

The Commission's primary objective in commencing this rulemaking
was to

[[Page 15027]]

expand the remedies available to it in combatting two prevalent
categories of impersonation scams most frequently reported by
consumers--government impersonators and business impersonators. As
explained throughout this SBP, based upon the record, including public
comments, the Commission finds the final rule will attain this
objective in a manner consistent with applicable law.
The final rule is straightforward and defines 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). It also avoids novelty by borrowing from existing rules and
statutory definitions.¹⁷³ At the same time, the final rule
is drafted with sufficient flexibility to address the various types of
conduct covered by the prohibition on the impersonation of government
and businesses. Furthermore, this rulemaking has provided ample
transparency and opportunity for public participation in accordance
with the underlying statutory requirements of section 18 of the FTC
Act, 15 U.S.C. 57a, the Administrative Procedure Act, and Part 1,
subpart B of the Commission's Rules of Practice.¹⁷⁴

VII. Congressional Review Act

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs has designated this
rule as not a ``major rule,'' as defined by 5 U.S.C. 804(2).

Endnotes

\1\ Fed. Trade Comm'n, Advance Notice of Proposed Rulemaking:
Trade Regulation Rule on Impersonation of Government 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.
\2\ See id. at 72904.
\3\ Those included, among others, numerous reports of government
impersonation scams reported to federal agencies as reflected in the
following public announcements. On March 7, 2022, the Federal Bureau
of Investigation issued a Public Service Announcement ``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.''
Similarly, on May 20, 2022, multiple federal law enforcement
agencies issued a scam alert spearheaded by the Social Security
Administration's Office of the Inspector General warning the public
of government impersonation scams involving the reproduction of
federal law enforcement credentials and badges. On June 3, 2022, the
Commission issued a press release noting that in some impersonation
scams, fraudsters have instructed consumers to convert cash into
cryptocurrency under false threats of government investigations or
fraud. See Fed. Trade Comm'n, Notice of Proposed Rulemaking: Trade
Regulation Rule on Impersonation of Government and Businesses, 87 FR
62741, 62742 (Oct. 17, 2022), https://www.federalregister.gov/documents/2022/10/17/2022-21289/trade-regulation-rule-onimpersonation-of-government-and-businesses.
\4\ See id. at 62741-51.
\5\ See id. at 62741-42.
\6\ Id. at 62750.
\7\ See Fed. Trade Comm'n, Trade Regulation Rule on
Impersonation of Government and Businesses, https://www.regulations.gov/docket/FTC-2022-0064/comments.
\8\ Cindy L. Brown and Raye Mitchell, Cmt. on NPRM at 9 (Dec.
19, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0077
(``Brown Cmt.''); William MacLeod, Cmt. on NPRM at 2 (Dec. 16,
2022), https://www.regulations.gov/comment/FTC-2022-0064-0078
(``MacLeod Cmt.'').
\9\ Fed. Trade Comm'n, Initial Notice of Informal Hearing: Trade
Regulation Rule on Impersonation of Government and Businesses, 88 FR
19024 (Mar. 30, 2023), https://www.federalregister.gov/documents/2023/03/30/2023-06537/trade-regulation-rule-on-impersonation-of-government-and-businesses. This Initial Notice of Informal Hearing
also served as the Final Notice of Informal Hearing. The Commission
determined William MacLeod's comment in response to the NPRM
represented an ``adequate request'' for such an informal hearing.
The comment from Cindy Brown explicitly requesting to make a
presentation at an informal hearing also represented an ``adequate
request'' triggering the Commission's obligation to hold an informal
hearing but was inadvertently omitted from inclusion in the Initial
Notice of Informal Hearing.
\10\ Because this informal hearing was the first held in several
decades, the Commission allowed interested parties to request the
opportunity to make an oral comment in response to the Notice of
Informal Hearing as well as the NPRM. However, the Commission noted
that in the future it may limit oral statements to those who
requested to make an oral statement in response to the NPRM, as
provided for in the Rules of Practice. Id. at 19025 n.24.
\11\ Although Cindy Brown did not submit a request to make an
oral statement in response to the Notice of Hearing, she was
permitted to make an oral statement at the hearing based upon her
prior comment in response to the NPRM in which she explicitly stated
her interest ``in making a presentation at an informal hearing.''
\12\ The Notice of Informal Public Hearing comments addressing
specific provisions of the rule or questions in the NPRM soliciting
public comment are discussed in Section III within the substantive
discussions on the relevant provisions.
\13\ 5 U.S.C. 551 et seq.; 16 CFR 1.7-1.20.
\14\ Rules of Practice, 16 CFR 1.14(a)(1)(i)-(iii). In addition,
in accordance with 16 CFR 1.14(a)(2), the regulatory analysis is
provided in Section VI of this SBP.
\15\ ANPR, 86 FR at 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.
\16\ NPRM, 87 FR at 62742.
\17\ Id. at 62742-46.
\18\ In re Cliffdale Assocs., Inc., 103 F.T.C. 110, 174 (1984);
see also In re POM Wonderful LLC, No. 9344, 2013 WL 268926, at *18
(Jan. 16, 2013).
\19\ ANPR, 86 FR at 72901.
\20\ NPRM, 87 FR at 62746-47.
\21\ ANPR, 86 FR at 72903-04; see also NPRM, 87 FR at 62748-49.
\22\ See AMG Cap. Mgmt., LLC v. FTC, 141 S. Ct. 1341, 1352
(2021).
\23\ See 15 U.S.C. 57b(a) and (b); see also NPRM, 87 FR at 62746
(discussing AMG Cap. Mgmt.).
\24\ The Commission can recover money for consumers directly
through a federal court action or obtain civil penalties directly
from a federal court when the Rule has been violated. Without the
Rule, the path to monetary relief is longer, and requires the
Commission to first issue a final cease-and-desist order--which
might not become final until after the resolution of any resulting
appeal. Then, to recover money for consumers, the Commission must
prove that the violator engaged in fraudulent or dishonest conduct
in a second action in federal court. See 15 U.S.C. 57b(a) and (b).
\25\ See section 5(m)(1)(A) of the FTC Act, 15 U.S.C.
45(m)(1)(A) (providing that violators of a trade regulation rule
``with actual knowledge or knowledge fairly implied on the basis of
objective circumstances that such act is unfair or deceptive and is
prohibited by such rule'' are liable for civil penalties for each
violation). In addition, any entity or person who violates such a
rule (irrespective of the state of knowledge) is liable for injury
caused to consumers by the rule violation. The Commission may pursue
such recovery in a suit for consumer redress under section 19 of the
FTC Act, 15 U.S.C. 57b.
\26\ NPRM, 87 FR at 62749.
\27\ Id.
\28\ https://www.regulations.gov/document/FTC-2021-0077-0001/comment.
\29\ https://www.regulations.gov/docket/FTC-2023-0030/comments.
\30\ NPRM, 87 FR at 62750.
\31\ Id.
\32\ Id., Question 3 (Does the proposed rule contain a
collection of information?) and Question 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?)
\33\ NPRM, 87 FR at 62750.
\34\ See, e.g., Anonymous, Cmt. on NPRM (Nov. 3, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0011 (describing
impersonation of accounts payable in medical device industry);
Bernadette Padilla, Cmt. on NPRM (Nov. 8, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0014 (describing police
impersonation scam involving stolen PII); Anonymous Meeting Planner,
Cmt. on NPRM (Dec. 6,

[[Page 15028]]

2022), https://www.regulations.gov/comment/FTC-2022-0064-0030
(describing attendee list and hotel reservation impersonation
scams); California IT in Education, Cmt. on NPRM (Nov. 9, 2022),
https://www.regulations.gov/comment/FTC-2022-0064-0034 (describing
attendee list impersonation scam); Illinois Landscape Contractors
Association, Cmt. on NPRM (Dec. 12, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0038 (describing attendee
list and hotel reservation impersonation scams).
\35\ See e.g., Salina Maddox, Cmt. on NPRM (Oct. 22, 2022),
https://www.regulations.gov/comment/FTC-2022-0064-0003 (spam calls);
Tatiana Alvarez, Cmt. on NPRM (Nov. 22, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0008 (Romanian mob scam);
Tinee Carraker, Cmt. on NPRM (Nov. 4, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0012 (foreclosure scam);
Susan Rounsley, Cmt. on NPRM (Nov. 6, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0013 (violations of Do Not
Call requirements).
\36\ See, e.g., Suhkvir Singh/Rutgers Law School Students, Cmt.
on NPRM (Nov. 22, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0019 (``Rutgers Law Students/Singh Cmt.''); AIM, the
European Brands Association, Cmt. on NPRM (Dec. 13, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0041 (``AIM Cmt.''); The
Messaging Malware Mobile Anti-Abuse Working Group, Cmt. on NPRM
(Dec. 15, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0051 (``M3AAWG Cmt.''); The International Trademark Association,
Cmt. on NPRM (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0054 (``INTA Cmt.''); Electronic Privacy Information
Center, National Consumer Law Center, National Consumers League,
Consumer Action, Consumer Federation of America, National
Association of Consumer Advocates, and U.S. PIRG, Cmt. on NPRM (Dec.
16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0070
(``EPIC Cmt.''); Recording Industry Association of America, Cmt. on
NPRM (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0064 (``RIAA Cmt.'').
\37\ United States Patent and Trademark Office, Cmt. on NPRM at
2-3 (Dec. 2, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0026 (``USPTO Cmt.''); INTA Cmt. on NPRM; United States
Copyright Office, Cmt. on NPRM (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0067 (``USCO Cmt.''); The
Toy Association, Inc., Cmt. on NPRM at 2 (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0069 (``Toy Cmt.'');
Cellular Telecommunications and Internet Association, Cmt. on NPRM
(Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0066 (``CTIA Cmt.''); Marine Retailers Association of the Americas,
National Marine Manufacturers Association, National RV Dealers
Association, Cmt. on NPRM (Dec. 19, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0076 (``MRAA Cmt.'').
\38\ See, e.g., USPTO Cmt. on NPRM at 2-3; USCO Cmt. on NPRM at
2; Toy Cmt. on NPRM at 2; CTIA Cmt. on NPRM at 3; MRAA Cmt. on NPRM
at 4. See also supra, note 25.
\39\ USPTO Cmt. on NPRM at 2-3.
\40\ MRAA Cmt. on NPRM at 4.
\41\ USCO Cmt. on NPRM at 2-3.
\42\ Id.; USPTO Cmt. on NPRM at 2.
\43\ CTIA Cmt. on NPRM at 5, 7.
\44\ Somos, Inc., Cmt. on NPRM at 2-3 (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0068 (``Somos Cmt.'').
\45\ In explaining the scope of the proposed rule, the NPRM
provided an illustrative, but non-exhaustive, list of unlawful
conduct that would be covered by the prohibitions against
impersonating government and businesses. NPRM, 87 FR at 62746-47.
That list merely provides examples as it would be impracticable to
list all possible violative conduct.
\46\ 16 CFR 310.4(a)(8).
\47\ USTelecom Cmt. on NPRM at 2; M3AAWG Cmt. on NPRM at 3-4;
RIAA Cmt. on NPRM at 3; Anti-Phishing Working Group, Cmt. on NPRM at
1-2 (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0073 (``APWG Cmt.''), https://www.regulations.gov/comment/FTC-2022-0064-0073 (``APWG Cmt.''); Coalition for Online Accountability,
Cmt. on NPRM at 1-3 (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0074 (``COA Cmt.''); INTA Cmt. on NPRM at 8-
10; Coalition for a Secure & Transparent Internet, Cmt. on NPRM at 1
(Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0065 (``CSTI Cmt.'').
\48\ Id.
\49\ M3AAWG Cmt. on NPRM at 3-4; RIAA Cmt. on NPRM at 3-4; AIM
Cmt. on NPRM at 1; COA Cmt. on NPRM at 1-3; INTA Cmt. on NPRM at 8-
10.
\50\ COA Cmt. on NPRM at 2.
\51\ M3AAWG Cmt. on NPRM at 3-4; APWG Cmt. on NPRM at 1-2; see
also APWG, Cmt. on Informal Hearing at 1-2 (Apr. 14, 2023), https://www.regulations.gov/comment/FTC-2023-0030-0027 (``APWG IH Cmt.'').
\52\ See NPRM, 87 FR at 62746-47. The example of voice cloning--
a relatively new technology--emphasizes the need for an
illustrative, but non-exhaustive, list of unlawful conduct. Audio
deepfakes, including voice cloning, are generated, edited, or
synthesized by artificial intelligence, or ``AI,'' to create fake
audio that seems real. See Khanjani, et. al., How Deep are the
Fakes? Focusing on Audio Deepfake: A Survey, available at https://arxiv.org/ftp/arxiv/papers/2111/2111.14203.pdf.
\53\ Americans for Prosperity Foundation, Cmt. on NPRM at 1-2
(Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0062 (``AFPF Cmt.'').
\54\ Id. at 1.
\55\ Public Law 93-637, 88 Stat. 2183 (1975).
\56\ ANPR, 86 FR at 72904.
\57\ Id.
\58\ NPRM, 87 FR at 62750, Question 2.
\59\ USPTO Cmt. on NPRM at 3-9; M3AAWG Cmt. on NPRM at 6-9; INTA
Cmt. on NPRM at 3-5; Toy Cmt. on NPRM at 3-5; USCO Cmt. on NPRM at
3-7; MRAA Cmt. on NPRM at 2-4.
\60\ USPTO Cmt. on NPRM at 3-9; M3AAWG Cmt. on NPRM at 6-9; INTA
Cmt. on NPRM at 3-5; Toy Cmt. on NPRM at 3-5; USCO Cmt. on NPRM at
3-7; MRAA Cmt. on NPRM at 2-4.
\61\ Toy Cmt. on NPRM at 3-5.
\62\ USPTO Cmt. on NPRM at 3-9; USCO Cmt. on NPRM at 3-4;
\63\ INTA Cmt. on NPRM at 3; M3AAWG Cmt. on NPRM at 7.
\64\ M3AAWG Cmt. on NPRM at 9.
\65\ Id.
\66\ Id.
\67\ NPRM, 87 FR at 62750, Question 5.
\68\ USCO Cmt. on NPRM at 8; USPTO Cmt. on NPRM at 10; INTA Cmt.
on NPRM at 6-7; M3AAWG Cmt. on NPRM at 9; MacLeod Cmt. on NPRM at 1-
2; AFPF Cmt. on NPRM at 3-6.
\69\ NetChoice Cmt. on NPRM at 2; Toy Cmt. on NPRM at 2;
ZoomInfo Technologies LLC, Cmt. on NPRM at 1-2 (Dec. 16, 2022),
https://www.regulations.gov/comment/FTC-2022-0064-0079 (``Zoom NPRM
Cmt.'').
\70\ USCO Cmt. on NPRM at 8; USPTO Cmt. on NPRM at 10.
\71\ USCO Cmt. on NPRM at 8.
\72\ USPTO Cmt. on NPRM at 10.
\73\ Id. at 9-10.
\74\ MacLeod Cmt. on NPRM at 2; AFPF Cmt. on NPRM at 3; M3AAWG
Cmt. on NPRM at 9.
\75\ M3AAWG Cmt. on NPRM at 2; NetChoice Cmt. on NPRM at 2; Toy
Cmt. on NPRM at 2; AFPF Cmt. on NPRM at 2, 4; Zoom Cmt. on NPRM at
1; INTA Cmt. on NPRM at 5-6; William MacLeod, Cmt. on Informal
Hearing at 5-7 (Apr. 14, 2023), https://www.regulations.gov/comment/FTC-2023-0030-0019 (``MacLeod IH Cmt.'').
\76\ AFPF Cmt. on NPRM at 2, 4; see also MacLeod IH Cmt. at 2.
\77\ AFPF Cmt. on NPRM at 3, 4. M3AAWG Cmt. on NPRM at 2;
NetChoice Cmt. on NPRM at 2; INTA Cmt. on NPRM at 5-6; Toy Cmt. on
NPRM at 2; Zoom Cmt. on NPRM at 1; MacLeod IH Cmt. at 5-7.
\78\ AFPF Cmt. on NPRM at 2, 6.
\79\ NetChoice Cmt. on NPRM at 2; M3AAWG Cmt. on NPRM at 3.
\80\ AFPF Cmt. on NPRM at 4; INTA Cmt. on NPRM at 5-6; Toy Cmt.
on NPRM at 2; Zoom Cmt. on NPRM at 1; MacLeod IH Cmt. at 5.
\81\ MacLeod IH Cmt. at 1; see also MacLeod Cmt. on NPRM at 1.
\82\ MacLeod IH Cmt. at 2.
\83\ Id. at 3.
\84\ Id. at 3.
\85\ AFPF Cmt. on NPRM at 3-4.
\86\ Id. at 3, 5-6.
\87\ M3AAWG Cmt. on NPRM at 9.
\88\ Id. at 1, 5.
\89\ AFPF Cmt. on NPRM at 5.
\90\ See 15 U.S.C. 45(m)(1)(A).
\91\ See Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of
N.Y., 447 U.S. 557, 563-64 (1980) (``[T]here can be no
constitutional objection to the suppression of commercial messages
that do not accurately inform the public about lawful activity. The
government may ban forms of communication more likely to deceive the
public than to inform it, or commercial speech related to illegal
activity.'') (citations omitted); see also Zauderer v. Office of
Disciplinary Counsel, 471 U.S. 626, 638 (1985) (holding it is ``well
settled'' that ``[t]he States and the Federal Government are free

[[Page 15029]]

to prevent the dissemination of commercial speech that is false,
deceptive, or misleading'').
\92\ USPTO Cmt. on NPRM; Anonymous, Cmt. on NPRM (Dec. 9, 2022),
https://www.regulations.gov/comment/FTC-2022-0064-0033 (``0033
Cmt.''); AIM Cmt. on NPRM; Erik M. Pelton & Associates, PLLC, Cmt.
on NPRM (Dec. 14, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0045; NetChoice Cmt. on NPRM; M3AAWG Cmt. on NPRM;
Consumer Technology Association, Cmt. on NPRM (Dec. 16, 2022),
https://www.regulations.gov/comment/FTC-2022-0064-0073 (``CTA
Cmt.''); NCTA--The internet and Television Association, Cmt. on NPRM
(Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0071 (``NCTA Cmt.''); ASAE Cmt. on NPRM; INTA Cmt. on NPRM; Somos
Cmt. on NPRM; CTIA Cmt. on NPRM; USCO Cmt. on NPRM; USTelecom Cmt.
on NPRM; American Society of Association Executives, Center for
Exhibition Industry Research Destinations International, Exhibition
Services & Contractors Association, Exhibitions & Conferences
Alliance, Experiential Designers + Producers Association,
International Association of Exhibitions & Events, International
Association of Venue Managers, PCMA, Society of Independent Show
Organizers, UFI, Cmt. on NPRM (Dec 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0060 (``ECA Cmt.''); RIAA
Cmt. on NPRM; American Bar Association Section of Intellectual
Property Law, Cmt. on NPRM at 3 (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0061 (``ABA-IPL Cmt.'');
AFPF Cmt. on NPRM; Zoom Cmt. on NPRM; American Bankers Association,
ACA International, American Association of Healthcare Administrative
Management, Credit Union National Association, Mortgage Bankers
Association National Association of Federally-Insured Credit Unions
(the Associations), Cmt. on NPRM (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0080 (``Assocns. Cmt.'');
COA Cmt. on NPRM; MacLeod Cmt. on NPRM; Brown Cmt. on NPRM.
\93\ A copy of the transcript of the May 4, 2023 Informal
Hearing is available at https://www.ftc.gov/system/files/ftc_gov/pdf/impersonationruleinformalhearingtranscript.pdf. References to
the transcript from the May 4, 2023 Informal Hearing are cited
herein as: Name of commenter, May 2023 Tr at page no. (e.g., Doe,
May 2023 Tr at #); see CTA, May 2023 Tr at 16; MacLeod, May 2023 Tr
at 27; USTelecom, May 2023 Tr at 30; Chilson, May 2023 Tr at 34;
VON, May 2023 Tr at 36; American Bankers Association (ABA), May 2023
Tr at 39-40; INCOMPAS, May 2023 Tr at 42, 44; NCTA, May 2023 Tr at
51-52.
\94\ USPTO Cmt. on NPRM at 10; USCO Cmt. on NPRM at 8; RIAA Cmt.
on NPRM at 3; ABA, May 2023 Tr at 39-40.
\95\ USPTO Cmt. on NPRM at 10; USCO Cmt. on NPRM at 8; RIAA Cmt.
on NPRM at 3; ABA, May 2023 Tr at 39-40.
\96\ AFPF Cmt. on NPRM at 3-5; MacLeod IH Cmt. at 6-7; McLeod,
May 2023 Tr at 27.
\97\ 0033 Cmt. on NPRM; ABA-IPL Cmt. on NPRM at 2; Zoom Cmt. on
NPRM at 1.
\98\ ABA-IPL Cmt. on NPRM at 1-2; NetChoice Cmt. on NPRM at 2;
USTelecom Cmt. on NPRM at 2; see also CTA, May 2023 Tr at 16; VON,
May 2023 Tr at 36; ABA, May 2023 Tr at 39-40; INCOMPAS, May 2023 Tr
at 42.
\99\ NetChoice Cmt. on NPRM at 2; CTA Cmt. on NPRM; American
Society of Association Executives, Cmt. on NPRM at 1 (Dec. 16,
2022), https://www.regulations.gov/comment/FTC-2022-0064-0057
(``ASAE Cmt.''); INTA Cmt. on NPRM; Somos Cmt. on NPRM; CTIA Cmt. on
NPRM at 7; USTelecom Cmt. on NPRM at 2; ECA Cmt. on NPRM at 3; ABA-
IPL Cmt. on NPRM at 3; Zoom Cmt. on NPRM at 2; Cmt. on NPRM at 3;
see also CTA, May 2023 Tr at 16; MacLeod, May 2023 Tr at 27;
USTelecom, May 2023 Tr at 30; Chilson, May 2023 Tr at 34; VON, May
2023 Tr at 36; INCOMPAS, May 2023 Tr at 42, 44; NCTA, May 2023 Tr at
51-52.
\100\ CTA Cmt. on NPRM at 7.
\101\ USTelecom Cmt. on NPRM at 2.
\102\ ABA-IPL Cmt. on NPRM at 3.
\103\ NCTA Cmt. on NPRM at 2.
\104\ M3AAWG Cmt. on NPRM at 10.
\105\ Brown Cmt. on NPRM at 8.
\106\ M3AAWG Cmt. on NPRM at 3.
\107\ COA Cmt. on NPRM at 3; M3AAWG Cmt. on NPRM at 4-5. ``WHOIS
data'' is a commonly used internet record listing that identifies
who owns a domain and how to get in contact with them.
\108\ See, e.g., Compl. at 3-5 & Ex. H, FTC v. Moore, No. 5:18-
cv-01960 (C.D. Cal. filed Sept. 13, 2018) (alleging that a seller of
variety of fake but genuine-looking financial documents provided to
others the means and instrumentalities with which to make
misrepresentations regarding a person's identity).
\109\ NPRM, 87 FR at 62746.
\110\ Id. at 62751; see also 15 U.S.C. 44.
\111\ NPRM, 87 FR at 62747.
\112\ Id. at 62750.
\113\ Minnesota Nursery & Landscape Association, Cmt. on NPRM at
2 (Dec. 2, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0027; Louise Nemmers, Cmt. on NPRM (Dec. 5, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0028; California Landscape
Contractors Association, Cmt. on NPRM (Dec. 6, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0029; Outdoor Power
Equipment Institute, Cmt. on NPRM at 2 (Dec. 7, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0032; AIM Cmt. on NPRM at
2; AARP, Cmt. on NPRM (Dec. 14, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0043 (``AARP Cmt.''); Minnesota Municipal
Utilities Association, Cmt. on NPRM (Dec. 14, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0048; M3AAWG Cmt. on NPRM
at 10; CTA Cmt. on NPRM; ASAE Cmt. on NPRM; INTA Cmt. on NPRM; Toy
Cmt. on NPRM at 6; RIAA Cmt. on NPRM at 2; National Association of
Broadcasters, Cmt. on NPRM (Dec. 19, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0075; MRAA Cmt. on NPRM at
4.
\114\ See, e.g., Toy Cmt. on NPRM at 6; MRAA Cmt. on NPRM at 4;
AARP Cmt. at 2; CTA Cmt. on NPRM at 1; ASAE Cmt. on NPRM; RIAA Cmt.
on NPRM at 1; INTA Cmt. on NPRM at 2.
\115\ AIM Cmt. on NPRM at 2; M3AAWG Cmt. on NPRM at 10; CTA Cmt.
on NPRM at 1.
\116\ Toy Cmt. on NPRM at 6; INTA Cmt. on NPRM at 6.
\117\ Toy Cmt. on NPRM at 6; RIAA Cmt. on NPRM at 3.
\118\ INTA Cmt. on NPRM at 6; Toy Cmt. on NPRM at 6.
\119\ NPRM, 87 FR at 62750.
\120\ Rutgers Law Students/Singh Cmt. on NPRM; AIM Cmt. on NPRM;
AARP Cmt. on NPRM; NCTA Cmt. on NPRM; EPIC Cmt. on NPRM; RIAA Cmt.
on NPRM.
\121\ AIM Cmt. on NPRM at 2; Rutgers Law Students/Singh Cmt. on
NPRM at 1.
\122\ Rutgers Law Students/Singh Cmt. on NPRM at 1-2; AARP Cmt.
on NPRM at 2; EPIC Cmt. on NPRM at 5.
\123\ Rutgers Law Students/Singh Cmt. on NPRM at 1-2.
\124\ Rutgers Law Students/Singh Cmt. on NPRM at 2-4; AARP Cmt.
on NPRM at 1-2; EPIC Cmt. on NPRM at 4-5.
\125\ AARP Cmt. on NPRM at 2.
\126\ EPIC Cmt. on NPRM at 5.
\127\ NCTA Cmt. on NPRM at 3, 8.
\128\ Id.
\129\ RIAA Cmt. on NPRM at 3.
\130\ Id. at 2.
\131\ Rutgers Law Students/Singh Cmt. on NPRM at 2.
\132\ Id.
\133\ Id. at 3.
\134\ Id.
\135\ Id. at 3-4.
\136\ Id.; NCTA Cmt. on NPRM at 8, n. 16.
\137\ The Commission also is exploring other tools to address
the fake endorsement concerns raised by the RIAA and Rutgers Law
School Students. Specifically, in the Commission's proposed Rule on
the Use of Consumer Reviews and Testimonials, Sec. 465.2 would
prohibit businesses from purchasing a consumer review, or from
disseminating or causing the dissemination of a consumer testimonial
or celebrity testimonial when the business knew or should have known
it was false or fake. See Fed. Trade Comm'n, Notice of Proposed
Rulemaking: Trade Regulation Rule on the Use of Consumer Reviews and
Testimonials, 88 FR 49364, 49391 (Jul. 31, 2023), https://www.federalregister.gov/documents/2023/07/31/2023-15581/trade-regulation-rule-on-the-use-of-consumer-reviews-and-testimonials#sectno-reference-465.2.
\138\ USTelecom Cmt. on NPRM at 2; M3AAWG Cmt. on NPRM at 3-4;
RIAA Cmt. on NPRM at 3; APWG Cmt. on NPRM; COA Cmt. on NPRM at 1-3;
INTA Cmt. on NPRM at 8-10; CSTI Cmt. on NPRM at 1.
\139\ Id.
\140\ M3AAWG Cmt. on NPRM at 3-4; RIAA Cmt. on NPRM at 3-4; AIM
Cmt. on NPRM at 1; COA Cmt. on NPRM at 1-3; INTA Cmt. on NPRM at 8-
10.
\141\ COA Cmt. on NPRM at 2.
\142\ M3AAWG Cmt. on NPRM at 3-4; APWG Cmt. on NPRM at 1-2; see
also APWG, Cmt. on Informal Hearing at 1-2 (Apr. 14, 2023), https://www.regulations.gov/comment/FTC-2023-0030-0027 (``APWG IH Cmt.'').
\143\ See also supra, note 52.

[[Page 15030]]

\144\ Toy Cmt. on NPRM at 2; M3AAWG Cmt. on NPRM at 2; ABA-IPL
Cmt. on NPRM at 3; INTA Cmt. on NPRM at 2.
\145\ ABA-IPL Cmt. on NPRM at 3.
\146\ Toy Cmt. on NPRM at 2; M3AAWG Cmt. on NPRM at 2; INTA Cmt.
on NPRM at 2.
\147\ INTA Cmt. on NPRM at 6-7.
\148\ NPRM, 87 FR at 62750.
\149\ See 15 U.S.C. 57b-3(b)(2).
\150\ 15 U.S.C. 57b-3(b)(2)(A).
\151\ See 5 U.S.C. 603-605; see also section 22(b) of the FTC
Act, 15 U.S.C. 57b-3(b).
\152\ NPRM, 87 FR at 62749-50; see also 5 U.S.C. 603.
\153\ NPRM, 87 FR at 62750.
\154\ NPRM, 87 FR at 62749.
\155\ See 15 U.S.C. 57b-3(b)(3)(A)(ii) (``In order to avoid
duplication or waste, the Commission is authorized to . . . whenever
appropriate, incorporate any data or analysis contained in a
regulatory analysis issued under this subsection in the statement of
basis and purpose.'').
\156\ NPRM, 87 FR at 62749-50.
\157\ See ANPR, 86 FR at 72901 & n.24 (discussing AMG Cap.
Mgmt.); NPRM, 87 FR at 62746 (same).
\158\ See ANPR, 86 FR at 72901 & n.24; NPRM, 87 FR at 62746; see
also 15 U.S.C. 57b(a) and (b).
\159\ See 15 U.S.C. 45(m)(1)(A).
\160\ NPRM, 87 FR at 62750.
\161\ Only one commenter suggested an alternative to regulation,
which the Commission declines to adopt for the reasons previously
stated in Section III.B.
\162\ See supra note 161.
\163\ Toy Cmt. on NPRM at 5-6; MRAA Cmt. on NPRM at 4.
\164\ Robert Kamerschen, Cmt. on NPRM at 2 (Nov. 30, 2022),
https://www.regulations.gov/comment/FTC-2022-0064-0023.
\165\ See NPRM, 87 FR at 62750.
\166\ NPRM, 87 FR at 62748.
\167\ Id.
\168\ See Fed. Trade Comm'n, Explore Government Imposter Scams,
TABLEAU PUBLIC, https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/SubcategoriesOverTime
(last visited December 21, 2023).
\169\ Id.
\170\ See 15 U.S.C. Secs. 45(m)(1)(A) and 57b.
\171\ See Toy Cmt. on NPRM at 5-6; MRAA Cmt. on NPRM at 4; see
also NPRM, 87 FR at 62749.
\172\ NPRM, 87 FR at 62750.
\173\ See, e.g., TSR, 16 CFR 310.3(a)(2)(vii); R-Value Rule, 16
CFR 460.21; Regulation O (Mortgage Assistance Relief Services), 12
CFR 1015.3(b)(3).
\174\ 5 U.S.C. 551 et seq.; 16 CFR 1.7 through 1.20.

List of Subjects in 16 CFR Part 461

Consumer protection, Impersonation, Trade Practices.

0
For the reasons set forth above, the Federal Trade Commission amends 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.
Authority: 15 U.S.C. 41 through 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.
Materially means likely to affect a person's choice of, or conduct
regarding, goods or services.
Officer includes executives, officials, employees, and agents.

Sec. 461.2 Impersonation of Government Prohibited.

It is a violation of this part, and an unfair or deceptive act or
practice to:
(a) materially and falsely pose as, directly or by implication, a
government entity or officer thereof, in or affecting commerce as
commerce is defined in the Federal Trade Commission Act (15 U.S.C. 44);
or
(b) materially misrepresent, directly or by implication,
affiliation with, including endorsement or sponsorship by, a government
entity or officer thereof, in or affecting commerce as commerce is
defined in the Federal Trade Commission Act (15 U.S.C. 44).

Sec. 461.3 Impersonation of Businesses Prohibited.

It is a violation of this part, and an unfair or deceptive act or
practice to:
(a) materially and falsely pose as, directly or by implication, a
business or officer thereof, in or affecting commerce as commerce is
defined in the Federal Trade Commission Act (15 U.S.C. 44); or
(b) materially misrepresent, directly or by implication,
affiliation with, including endorsement or sponsorship by, a business
or officer thereof, in or affecting commerce as commerce is defined in
the Federal Trade Commission Act (15 U.S.C. 44).

By direction of the Commission.
April J. Tabor,
Secretary.

Note: The following statement will not appear in the Code of
Federal Regulations.

Statement of Chair Lina M. Khan Joined by Commissioner Rebecca Kelly
Slaughter and Commissioner Alvaro M. Bedoya

Today the Federal Trade Commission finalizes its rule prohibiting
government and business impersonation schemes and issues a supplemental
notice of proposed rulemaking to extend this prohibition to
impersonation of individuals. This final rule marks the first time
since 1980 that the Commission has finalized a brand-new trade
regulation rule prohibiting an unfair or deceptive practice.
Impersonation schemes cheat Americans out of billions of dollars
every year. Fraudsters pretending to represent government agencies--
like the Social Security Administration or the IRS--tell targets that
if they do not hand over money or their sensitive personal information,
then they could lose a government benefit, face a tax liability, or
even be arrested. Scammers also commonly claim false affiliations with
household brand names to bilk consumers for bogus services. This
category of fraud skyrocketed during the coronavirus pandemic--with
imposters scamming Americans out of reported $2 billion between October
2020 and September 2021, an 85 percent increase year-over-year.\1\
Losses remain high: FTC data show that in 2023 consumers reported
losing $2.7 billion to reported imposter scams.\2\ Impersonation fraud
has remained one of the largest sources of total reported consumer
financial losses for several years.\3\
---------------------------------------------------------------------------

\1\ Fed. Trade Comm'n, Fraud Reports: Trends Over Time (2021),
https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/FraudFacts.
\2\ Fed. Trade Comm'n, Consumer Sentinel Network Data Book 2023
(2024), https://www.ftc.gov/reports/consumer-sentinel-network-data-book-2023.
\3\ Fed. Trade Comm'n, Fraud Reports: Top Reports, Tableau
Public (last accessed Feb. 8, 2024), https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/TopReports; see
also Fed. Trade Comm'n, Consumer Sentinel Network Data Book 2020
(2021) at 4-8, https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-databook-2020/csn_annual_data_book_2020.pdf; see also, Consumer Sentinel Network
Data Book 2023, supra note 2.
---------------------------------------------------------------------------

Public comments submitted to the Commission provide a snapshot of
how impersonation frauds can devastate:
One commenter reported on how a friend was scammed by
someone claiming that they were with Publisher's Clearing House and
that she had won a sweepstakes. Her friend was scammed out of a total
of $367,000: ``She used all of her savings . . . to help her
grandchildren go to college and wiped out her IRA and now is left to
pay the

[[Page 15031]]

penalties for depleting it. This woman is now, at age 70, in a position
of living only on her social security and has to try to find work. . .
.'' \4\
---------------------------------------------------------------------------

\4\ Comment Submitted by Anonymous, FTC Seek Comments on
Advanced Notice of Proposed Rule; Impersonation ANPR,
Regulations.gov (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0131.
---------------------------------------------------------------------------

Another commenter received a call from someone claiming to
be with the U.S. Treasury Department, who asserted that her social
security number had been compromised. This person lost all her money:
``That money is from my mother's life insurance policy who passed in
2019. My father needs that money to survive. I am devastated.'' \5\
---------------------------------------------------------------------------

\5\ Comment Submitted by Jamila Sherman, FTC Seek Comments on
Advanced Notice of Proposed Rule; Impersonation ANPR,
Regulations.gov (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0127.
---------------------------------------------------------------------------

A third commenter spoke of her mother being scammed by
someone pretending to be with a government agency: ``Before we, her
family, realized the extent to which the imposters preyed upon her, she
had divulged identity and banking information.'' \6\
---------------------------------------------------------------------------

\6\ Comment Submitted by Susan Frost, FTC Seek Comments on
Advanced Notice of Proposed Rule; Impersonation ANPR,
Regulations.gov (Feb. 16, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0031.
---------------------------------------------------------------------------

The rise of generative AI technologies risks making these problems
worse by turbocharging scammers' ability to defraud the public in new,
more personalized ways. For example, the proliferation of AI chatbots
gives scammers the ability to generate spear-phishing emails using
individuals' social media posts and to instruct bots to use words and
phrases targeted at specific groups and communities.\7\ AI-enabled
voice cloning fraud is also on the rise, where scammers use voice-
cloning tools to impersonate the voice of a loved one seeking money in
distress or a celebrity peddling fake goods.\8\ Scammers can use these
technologies to disseminate fraud more cheaply, more precisely, and on
a much wider scale than ever before.
---------------------------------------------------------------------------

\7\ Bob Violino, AI Tools Such As ChatGPT Are Generating A
Mammoth Increase In Malicious Phishing Emails, CNBC (Nov. 28, 2023),
https://www.cnbc.com/2023/11/28/ai-like-chatgpt-is-creating-huge-increase-in-malicious-phishing-email.html.
\8\ Eric Revell, AI Voice Cloning Scams On The Rise, Expert
Warns, Fox Business (Sept. 23, 2023), https://www.foxbusiness.com/technology/ai-voice-cloning-scams-on-rise-expert-warns.
---------------------------------------------------------------------------

In its supplemental NPRM, the Commission proposes to expand the
rule's prohibitions to also cover impersonation of individuals. If
adopted, this additional protection will equip enforcers to seek civil
penalties and redress when fraudsters impersonate individual people,
not just government or business entities. Given the proliferation of
AI-enabled fraud, this additional protection seems especially critical.
Notably, the supplemental proposal also recommends extending liability
to any actor that provides the ``means and instrumentalities'' to
commit an impersonation scam. Under this approach, liability would
apply, for example, to a developer who knew or should have known that
their AI software tool designed to generate deepfakes of IRS officials
would be used by scammers to deceive people about whether they paid
their taxes. Ensuring that the upstream actors best positioned to halt
unlawful use of their tools are not shielded from liability will help
align responsibility with capability and control.
By unlocking civil penalties and redress, the final rule, along
with the proposed supplemental provisions, will promote both more
efficient enforcement and greater deterrence. In 2020, the Supreme
Court held that the Commission cannot rely on Section 13(b) of the FTC
Act to get money back to defrauded consumers,\9\ so rulemakings--while
not a substitute for a legislative fix--can help ensure that
lawbreakers do not profit from their lawbreaking and that wronged
consumers can be made whole.
---------------------------------------------------------------------------

\9\ AMG Cap. Mgmt., LLC v. FTC, 593 U.S. (2021).
---------------------------------------------------------------------------

This rule marks the agency's first brand-new Section 18 rulemaking
since 1980. Although the authority to issue rules is clearly laid out
in the FTC Act, bureaucratic red tape presented an obstacle to the
agency's exercise of this important statutory authority. Thanks to
efforts initiated under Commissioner Slaughter's leadership to align
the procedural requirements for Section 18 rulemaking with the FTC
Act's statutory text, Section 18 rulemakings can now proceed more
efficiently.\10\ This effort took two years from proposal to final
rule, finally putting lie to the old idea that this must be an
impossibly long process.
---------------------------------------------------------------------------

\10\ Press Release, Fed. Trade Comm'n, FTC Votes to Update
Rulemaking Procedures, Sets Stage for Stronger Deterrence of
Corporate Misconduct (July 1, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/07/ftc-votes-update-rulemaking-procedures-sets-stage-stronger-deterrence-corporate-misconduct.
---------------------------------------------------------------------------

Many thanks to the FTC team for their swift work and dedication.
This rule banning government and business impersonation will allow us
to more vigorously and effectively protect Americans from fraudsters.
And we are eager for public input on the supplemental NPRM that would
extend this rule to cover impersonation of individuals. With the rapid
rise of voice cloning fraud and other AI-based scams, additional
protection for consumers seems especially critical. As these
technologies enable more sophisticated and innovative forms of fraud,
we will continue to ensure the Commission is activating all the tools
Congress has given us and faithfully executing on our statutory
mandate.

[FR Doc. 2024-04335 Filed 2-29-24; 8:45 am]
BILLING CODE 6750-01-P