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The Federal Trade Commission (FTC) has said in a new announcement that impersonation scams cost consumers $2.95bn (£2.30bn), marking the first year that the Impersonation Rule has been in effect in the US.
According to the FTC, scams impersonating businesses and the government are consistently among the top frauds in the country.
In its latest update, it said it had brought five cases of alleged rule breaches and closed 13 websites impersonating the commission online since the rule was introduced a year ago, barring people from posing as government officials or misrepresenting their relationship with the government.
In one case, the FTC alleged that a student debt relief company, Superior Servicing, pretended to be affiliated with the U.S. Department of Education and falsely promised student loan forgiveness in return for millions of dollars from student loan borrowers. In November, a federal court temporarily halted the scheme and froze its assets at the request of the FTC, which is seeking a permanent ban on the defendants’ practices.
Chris Mufarrige, director of the Bureau of Consumer Protection, said the scams were imposing huge costs on Americans.
“The billions of dollars American consumers lose at the hands of impersonators is staggering,” he said. “The FTC will not hesitate to enforce the Impersonation Rule against bad actors.”
The Impersonation Rule makes it illegal to:
- Materially and falsely pose as a government entity or officer, in or affecting commerce; or materially misrepresent affiliation with a government entity, in or affecting commerce.
- Materially and falsely pose as, directly or by implication, a business or officer thereof, in or affecting commerce; or materially misrepresent, directly or by implication, affiliation with, including endorsement or sponsorship by, a business or officer thereof, in or affecting commerce.
Individuals or companies breaching the Impersonation Rule can face fines and repayment demands of up to $53,088 per breach.
The news comes as fraud across the world continues to be front of mind for authorities. For example, in Singapore, the local financial regulator warned members of the public about the use of payment platforms to defraud people amid a wave of impersonation scams in the country.
Meanwhile, in the UK, there was a fall in the number of impersonation scams in 2024, according to trade body UK Finance, but at much higher values than purchase scams. UK Finance said this reflects a change in fraudsters’ focus to higher volume, lower value attacks.
