Trade Regulation Rule on Impersonation of Government and Businesses, 15072-15083 [2024-03793]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 89, Number 42 (Friday, March 1, 2024)]
[Proposed Rules]
[Pages 15072-15083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03793]


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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: Supplemental notice of proposed rulemaking; request for public 
comment.

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SUMMARY: The Federal Trade Commission (FTC or Commission) requests 
public comment on its proposal to amend the trade regulation rule 
entitled Rule on Impersonation of Government and Businesses 
(Impersonation Rule or Rule) to revise the title of the Rule, add a 
prohibition on the impersonation of individuals, and extend liability 
for violations of the Rule to parties who provide goods and services 
with knowledge or reason to know that those goods or services will be 
used in impersonations of the kind that are themselves unlawful under 
the Rule. The Commission believes these changes are necessary and such 
impersonation is prevalent, based on all comments it received on the 
Rule and other information discussed in this document. The Commission 
now solicits written comment, data, and arguments concerning the 
utility and scope of the proposed revisions to the Impersonation Rule.

DATES: Comments must be received on or before April 30, 2024.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Comment Submissions part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Impersonation SNPRM, 
R207000'' on your comment and file your comment online at https://www.regulations.gov. If you prefer to file your comment on paper, mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex 
I), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Claire Wack, [email protected], (202-326-
2836).

SUPPLEMENTARY INFORMATION: The Commission invites interested parties to 
submit data, views, and arguments on the proposed amendments to the 
Impersonation Rule and, specifically, on the questions set forth in 
Section VIII of this supplementary notice of proposed rulemaking 
(``SNPRM''). The comment period will remain open until April 30, 2024. 
To the extent practicable, all comments will be available on the public 
record and posted at the docket for this rulemaking on https://www.regulations.gov. If interested parties request to present their 
position orally, the Commission will hold an informal hearing, as 
specified in section 18(c) of the FTC Act, 15 U.S.C. 57a(c). Any 
request for an informal hearing must be submitted as a written comment 
within the comment period and must include: (1) a request to make an 
oral submission, if desired; (2) a statement identifying the person's 
interests in the proceeding; and (3) any proposals to add disputed 
issues of material fact that need to be resolved during the hearing. 
See 16 CFR 1.11(e). Any comment requesting an informal hearing should 
also include a statement explaining why an informal hearing is 
warranted and a summary of any anticipated oral or documentary 
testimony. If the comment identifies disputed issues of material fact, 
the comment should include evidence supporting such assertions. If the 
Commission schedules an informal hearing, either on its own initiative 
or in response to request by an interested party, the FTC will publish 
a separate document notifying the public pursuant to 16 CFR 1.12(a) 
(``initial notice of informal hearing'').

I. Background

A. Trade Regulation Rule on Impersonation of Government and Business

    Published elsewhere in this issue of the Federal Register is the 
Commission's final Trade Regulation Rule entitled ``Rule on 
Impersonation of Government and Business,'' promulgated under the 
authority of section 18 of the FTC Act, 15 U.S.C. 57a(b)(2); the 
provisions of Part 1, Subpart B, of the Commission's Rules of Practice, 
16 CFR 1.7-1.20; and the Administrative Procedure Act (``Impersonation 
Rule'' or ``Rule''). This authority permits the Commission to 
promulgate, modify, or repeal trade regulation rules that define with 
specificity acts or practices that are unfair or deceptive in or 
affecting

[[Page 15073]]

commerce within the meaning of section 5(a)(1) of the FTC Act, 15 
U.S.C. 45(a)(1).
    Promulgation of this Rule followed publication of an Advance Notice 
of Proposed Rulemaking (ANPR) on December 23, 2021,\1\ and a Notice of 
Proposed Rulemaking on October 17, 2022 (NPRM).\2\ On March 30, 2023, 
the Commission published an Initial Notice of Informal Hearing,\3\ and 
on May 4, 2023, Chief Administrative Law Judge D. Michael Chappell 
presided over the informal hearing,\4\ which was viewable 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.

B. Need for a Supplemental Notice of Proposed Rulemaking as to 
Impersonation of Individuals and Liability for Provision of Goods and 
Services Used in Impersonation Scams

    Based on the comments in response to the ANPR, NPRM, Notice of 
Informal Hearing, and Informal Hearing, as well as the Commission's 
history of enforcement and reports to the Commission from consumers and 
other sources, as discussed in Section V below, the Commission has 
reason to believe the deceptive or unfair impersonation of individuals 
and other parties not currently addressed by the Impersonation Rule is 
prevalent and taking comments on additional proposed provisions is in 
the public interest.
    Additionally, as stated in the Statement of Basis and Purpose for 
the Rule, Question 6 of the NPRM asked for comments on whether the 
final rule should contain a prohibition against providing the means and 
instrumentalities for violations against government or business 
impersonation.\5\ As summarized in this document, the Commission 
received more than 20 comments that expressly addressed this question, 
and many of the sentiments reflected in these comments were also echoed 
by several commenters that presented oral statements at the Informal 
Hearing.\6\ Based upon the comments received in connection with the 
proposed provision regarding means and instrumentalities, the 
Commission decided that the specific provision warranted further 
analysis and consideration, and the Commission declined to adopt what 
was then proposed 16 CFR 461.4. Instead, the Commission stated it would 
continue to consider the issue, including soliciting additional 
comment. This SNPRM discusses the comments the Commission received on 
this proposed section. It also discusses how the comments submitted in 
response to the Commission's earlier requests for comment informed the 
Commission's current proposals to (1) rename the Impersonation Rule the 
``Rule on Impersonation of Government, Businesses, and Individuals;'' 
(2) include a definition of ``individual'' in the Rule; (3) amend the 
Rule to include a prohibition of impersonation of individuals; and (4) 
extend liability to parties who provide goods and services with 
knowledge or reason to know that those goods or services will be used 
in impersonations of the kind that are themselves unlawful under the 
Rule, as amended. The Commission also poses specific questions for 
comment. Finally, the SNPRM provides the proposed amended text of the 
Rule.

II. Summary of Comments to ANPR

    The Commission published the ANPR on December 23, 2021, and took 
comments for 60 days. The Commission invited the public to comment on 
any issues or concerns the public believes are relevant or appropriate 
to the Commission's consideration of the proposed rule and also posed 
13 specific questions for the public.\7\ Relevant to this SNPRM, the 
Commission solicited public comment on the prevalence and methods of 
impersonation of individuals or entities other than governments and 
businesses in interstate commerce and whether and how individuals and 
entities provide the means and instrumentalities used in the 
impersonation of government, businesses, and individuals.\8\
    The Commission received 164 timely and unique comments in response 
to the ANPR, which are publicly available on this rulemaking's docket 
at https://www.regulations.gov/docket/FTC-2021-0077/comments.\9\ No 
commenter expressed the view that the Commission should not commence 
this rulemaking. Most comments--140--came from individual consumers. 
Ten comments were submitted by businesses,\10\ 11 by trade 
associations,\11\ and three by government agencies.\12\

A. Comments About the Impersonation of Individuals

    Seven commenters discussed the significant impact of impersonation 
of individuals or parties other than government or businesses. NAAG 
stated that State consumer protection agencies receive thousands of 
complaints annually regarding imposter scams that do not fit into 
government or business impersonation, for example grandparent or 
romance scams, and that ``data from state consumer protection agencies 
suggests that these scams are only becoming more common.'' \13\ WMC 
Global, a cybersecurity company, listed executive impersonation, public 
figure impersonation, and political impersonation as categories of 
individual impersonation of which it is aware.\14\ It identified Short 
Message Services (``SMS''), email, social media, and voice calls as 
primary methods used by impersonators in contacting consumers.\15\
    In addition to those categories of impersonation of individuals, 
multiple individual commenters recounted their personal experience with 
impersonation of real or fictitious individuals. One individual 
commenter reported receiving a call from an individual falsely posing 
as her grandson and requesting bail money and stated, ``it is very easy 
to give them a lot of money because they [ ] sound so true and reliable 
and all that and they are just taking money from elderly people hand 
over fist.'' \16\ Another consumer, identified as a victim to a romance 
scam, stated ``I feel like nothing can be trusted anymore on the 
internet and victims are left picking up their pieces of their life and 
there is zero accountability in catching these crooks.'' \17\

B. Comments About the Means and Instrumentalities of Impersonation

    Six commenters addressed the Commission's questions regarding 
individuals or entities that provide the means and instrumentalities 
for impersonators to conduct such practices, and the goods and services 
those individuals or entities provide.
    NAAG asserted impersonators ``often use other companies' products 
and services to execute their scams,'' such as ``marketing companies, 
call centers, attorneys, third-party mailing services, payment 
processors, lead list providers, remote offices . . . [d]ating 
websites, and social media . . . .'' \18\ It also addressed the 
Commission's question regarding the circumstances under which the 
provision of means and instrumentalities should be considered deceptive 
or unfair, opining that ``when an entity provides substantial 
assistance or support to impersonators and knows or should have known 
that their products [or] services are being used in a fraudulent 
impersonation scheme, that company could also be held liable under the 
proposed impersonation rule.'' \19\
    Apple, Inc., submitted a comment urging the Commission to adopt a 
rule targeting bad actors and their

[[Page 15074]]

``facilitators'' that are engaging in impersonation fraud without 
stifling legitimate business activity.\20\ Apple stated that 
impersonators who have obtained stolen gift cards use gray markets \21\ 
to sell the items purchased with those cards, making it harder for 
consumers to detect the fraud.\22\ Apple stated that gray markets are 
primary ``means and instrumentalities'' that impersonators use to 
conduct their scams.\23\
    Microsoft stated that scammers typically rely on payment processors 
to receive money from victims of impersonation scams.\24\ They also 
utilize affiliate marketing services to advertise to consumers through 
malicious ads and pop-up windows.\25\
    Erik M. Pelton & Associates (``EMP&A''), a trademark law firm in 
Virginia, identified several types of entities that may provide the 
means and instrumentalities for trademark scammers, including landlords 
providing office space, mail services, the U.S. Postal Service, 
``various banks and payment processing services,'' and domain 
registrars and website hosting services that host bad actors' 
websites.\26\ EMP&A also stated that provision of these goods and 
services ``should be considered deceptive or unfair following a 
procedure for putting service providers on notice of the fact that they 
are unwittingly enabling scammers . . . If scammers are denied these 
means and instrumentalities, it will become difficult for the scams to 
be profitable and hopefully they will cease operation.'' \27\
    USTelecom, a trade association representing the broadband 
technology industry, recommended liability for ``individuals or 
entities that provide the means and instrumentalities for impersonators 
. . . such as how the FTC has used the [Telemarketing Sales Rule] 
against robocall enablers,'' but noted that the proposed rule ``should 
make clear that liability . . . requires proof of knowledge of such 
fraud or conscious avoidance of it, consistent with FTC precedent and 
[Telemarketing Sales Rule] and Section 5 jurisprudence.'' \28\
    Somos, Inc., which manages registry databases for the 
telecommunications industry, similarly encouraged the ``[p]rosecution 
of . . . those knowingly aiding and abetting'' impersonated toll-free 
numbers.'' \29\

III. Summary of Comments to NPRM

    The Commission published the NPRM on October 17, 2022.\30\ In the 
NPRM, the Commission concluded that there is reason to believe that 
impersonation of government, businesses, and their officials or agents 
is prevalent.\31\ 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 positions orally at an informal 
hearing.\32\ Finally, the NPRM set out the Commission's proposed 
regulatory text.
    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.\33\ The majority of 
comments generally supported the rule as proposed in the NPRM, but some 
comments raised concerns and recommended specific modifications or 
additions to the proposed rule.

A. Comments About Individual Impersonations

    The Commission received six comments in response to the NPRM that 
specifically addressed the impersonation of individuals or entities 
other than government and businesses. A group of Rutgers Law School 
students urged inclusion of a prohibition on impersonation of 
individuals and cited an Elder Fraud Report issued by the Federal 
Bureau of Investigation, stating that ``victims over 60 of confidence 
fraud and romance scams have steadily increased by approximately 30% 
since 2019.'' \34\ AIM, the European Brands Association, and the 
Recording Industry Association of America (``RIAA''), also provided 
comment in support of inclusion of a prohibition on impersonating 
individuals.\35\ The American Association of Retired Persons (``AARP'') 
strongly urged the inclusion of a prohibition on impersonation of 
individuals or entities other than governments and businesses, noting 
that romance scams, which ``rely on the criminal making the target 
believe they are in a trusted love relationship to steal from them,'' 
resulted in losses reported to AARP of over $500 million in 2021 (which 
the AARP believed to be ``a vast undercount'' of harm).\36\ AARP 
additionally stated that its Fraud Watch Helpline received more than 
100,000 calls ``ranging from targets who report scams they avoided, 
consumers trying to determine if something is legitimate, and from 
victims and their family members.'' \37\
    The Electronic Privacy Information Center and other consumer and 
privacy advocacy organizations strongly urged the Commission to include 
impersonations of individuals in the rule.\38\ The Electronic Privacy 
Information Center noted that ``the actual number of reported losses 
from romance and other familial scams are not as high as those reported 
to be caused by the government and business imposters,'' but because of 
the ``personal nature'' of individual impersonation scams, ``it is 
highly likely that many fewer victims of these scams actually make 
reports to government and other agencies about the devastating losses 
they have suffered.'' \39\ Finally, NCTA--The internet and Television 
Association (``NCTA'') noted that its member companies ``have seen an 
increase in sophisticated `RES IP' scams to impersonate customers 
online and route traffic through their home networks and residential IP 
addresses.'' \40\

B. Comments About the Means and Instrumentalities of Impersonation

    Twenty-two comments expressly addressed Question 6 of the NPRM, 
which asked whether the final rule should contain a prohibition against 
providing the means and instrumentalities for violations against 
government or business impersonation.\41\ Most of the commenters 
expressed support for the inclusion of a means and instrumentalities 
provision, some with modification, while two expressed concerns with 
the inclusion of such a prohibition.
    Of the commenters supporting inclusion of a means and 
instrumentalities prohibition, three of the commenters encouraged the 
Commission to finalize the text of the proposed rule without 
modification.\42\ These comments argued that inclusion of means and 
instrumentalities liability would help combat impersonation schemes 
perpetrated by foreign-based scammers that are outside of U.S. court 
jurisdiction but obtain services from U.S.-based entities such as 
payment processors and internet service providers.\43\
    Most commenters who addressed Question 6 of the NPRM expressed 
their support for means and instrumentalities liability but recommended 
certain modifications. Some expressed concerns that the proposed 
language could be read too broadly.\44\ Others expressed concern that 
without a specific scienter or knowledge requirement, the proposed 
provision runs the risk of imposing strict liability against third 
parties who supply goods or services with no knowledge that those goods 
or services would be used in the commission of

[[Page 15075]]

unlawful impersonations.\45\ Accordingly, several commenters urged the 
Commission to clarify the scope of means and instrumentalities 
liability or explicitly include a knowledge requirement in the final 
rule provision.\46\
    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, which seem to limit its 
applicability, are ``not squarely reflected in the text of the proposed 
rule.'' \47\ CTA urged the FTC to limit the bounds of ``means and 
instrumentalities'' in the text of the rule ``to entities that have 
knowledge or consciously avoid knowing that they are making 
representations being used to commit impersonation fraud.'' \48\ Somos, 
in its comment, supported the inclusion of a means and 
instrumentalities provision, but added that ``those involved must 
knowingly be aiding and abetting the impersonation fraud.'' \49\
    USTelecom 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).\50\ USTelecom argued that such modification 
would ``help to avoid confusion about the new rule's scope and 
application with regards to intermediaries that, by no fault of their 
own and by nature of the services they offer, were unintentional 
conduits for impersonation fraud.'' \51\ EMP&A similarly stated that it 
supported adding ``that the party must have known or should have known 
that it was providing a means or instrumentality to facilitate a scam'' 
because without such modification ``parties could be held liable even 
if they had no intention to facilitate the scam.'' \52\
    The American Bar Association Section of Intellectual Property Law 
argued that ``there should be an explicit requirement that parties at 
least knew or should have known that they were providing the means or 
instrumentalities'' for unlawful impersonation, and suggested that the 
Commission could ``explicitly include 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.' '' \53\ CTIA, an industry group that represents the U.S. 
wireless communications industry, argued that the NPRM would make 
liable parties ``providing means and instrumentalities to another 
entity only where the resulting fraud is a predictable consequence of 
those actions'' and that ``the proposed rule will appropriately target 
those actors with malicious intent, while avoiding `unduly burdening or 
stifling legitimate business activities,' or punishing `an innocent 
entity whose ordinary course of work brought it--unknowingly--into 
contact with a bad actor.' '' \54\
    Other commenters argued that inclusion of a scienter requirement is 
a necessary but insufficient modification of the proposed language to 
impose means and instrumentalities liability. For example, NCTA argued 
that ``liability requires both providing deceptive means and 
instrumentalities, e.g., providing false or misleading claims or 
counterfeit items, and actual knowledge that the deceptive 
representations or goods will be used to commit impersonation 
violations.'' \55\ Likewise, the Messaging, Malware and Mobile Anti-
Abuse Working Group (``M3AAWG'') advocated that, in addition to a 
``knowledge or reason-to-know test,'' primary liability under the 
NPRM's proposed 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.\56\
    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,\57\ manipulated media technologies 
(i.e., deepfakes),\58\ or failure to disclose WHOIS data.\59\
    Two commenters expressed broad concerns with the proposed language 
of the means and instrumentalities prohibition in the NPRM. First, the 
Americans for Prosperity Foundation (``AFPF'') stated that the proposed 
rule, as drafted, ``fails to provide regulated parties with 
constitutionally adequate notice of required or prohibited conduct, 
particularly with respect to the proposed `means and instrumentalities' 
prohibition.'' \60\ AFPF argued that the proposed provision as proposed 
is untethered to the Commission's authority under section 5 as, in 
AFPF's view, it neither required the Commission to prove any of the 
elements of deception nor contained a scienter requirement.\61\ AFPF 
suggested that the Commission ``not only tether violations to Section 
5's text . . . , but also define with specificity the universe of 
prohibited conduct . . . [and] also revise the proposed rule to make 
clear that only conduct that a reasonable person would know is 
fraudulent or dishonest may be subject to civil penalties.'' AFPF 
requested a supplemental NPRM or an additional 30 days of comment and 
additionally requested the Commission hold an informal public hearing 
to receive additional public input.\62\ Second, William MacLeod cited 
concerns that the proposed rule left ``unresolved questions of how the 
Commission would apply'' the proposed means and instrumentalities 
provision.\63\ Mr. MacLeod stated his belief that the rulemaking 
process would benefit from ``an opportunity for interested parties to 
exchange ideas'' and accordingly requested a hearing.\64\

IV. Summary of Comments in Response to Notice of Hearing and Statements 
at Hearing

    On March 30, 2023, the Commission published an Initial Notice of 
Informal Hearing.\65\ In response to the Notice of Informal Hearing, 
the Commission received 28 comments, which are publicly available on 
this rulemaking's docket at https://www.regulations.gov/docket/FTC-2023-0030/comments, including 13 requests to make oral statements.\66\ 
One comment in response to the Notice of Informal Hearing was relevant 
to this SNPRM, and eight commenters at the informal hearing provided 
testimony relevant to this SNPRM.
    The American Bankers Association urged adoption of the means and 
instrumentalities provision without requesting any modifications.\67\ 
However, the other commenters who addressed the means and 
instrumentalities provision expressed concern that the proposed 
language in the NPRM did not explain the circumstances under which the 
Commission would apply that prohibition. Some suggested alternative 
language imposing a scienter requirement to narrow the scope of this 
provision.\68\

[[Page 15076]]

    In addition to his request to make an oral statement at the 
hearing, William MacLeod expressed in his comment to the Notice of 
Informal Hearing his concern that the proposed means and 
instrumentalities prohibition in the NPRM did not include any knowledge 
standard and requested that the final rule ``explain the definitions 
and limitations of [means and instrumentalities] as the Commission 
intends to apply it.'' \69\ In his oral testimony at the informal 
hearing, Mr. MacLeod reiterated his request for further clarification 
that ``providing the means and instrumentalities doesn't . . . 
automatically expose everyone involved, from the actors to the ISPs to 
civil penalties. People unaware of a fraud should not face massive 
liability for it.'' \70\
    The CTA expressed strong support for the NPRM but also concern that 
the prohibition on providing means and instrumentalities did not 
``include a knowledge requirement and could be misinterpreted to impose 
strict liability'' on unwitting third parties.\71\ USTelecom requested 
that the Commission clarify ``that liability for providing the means 
and instrumentalities of the illegal impersonation only attaches when a 
person has knowledge or reason to expect it is providing such a means 
and instrumentalities,'' so there is no confusion regarding the 
liability of ``unknowingly unintentional conduits for impersonation 
fraud.'' \72\ Neil Chilson, a senior research fellow at the Center for 
Growth and Opportunity at Utah State University, also requested that 
the prohibition against providing means and instrumentalities include a 
knowledge requirement for liability.\73\ The Voice on the Net Coalition 
(``VON''), an internet communication trade association, urged that the 
means and instrumentalities provision be modified to require knowledge 
before liability is imposed.\74\ VON further asserted that the 
``liability standard should be based on knowledge and the lack of 
action to prevent fraudulent activity by upstream providers or 
customers.'' \75\ INCOMPAS, which represents communications and 
technology companies offering broadband video and data offerings, also 
urged a liability standard ``based on knowledge and the lack of action 
to prevent fraudulent activity by upstream providers for customers.'' 
\76\ NCTA urged the Commission to ``explicitly incorporate the 
fundamental elements of both actual knowledge and deception'' into any 
final rule imposing means and instrumentalities liability.\77\ NCTA 
also urged that the final rule's application of means and 
instrumentalities liability only apply where ``inherently deceptive 
means and instrumentalities'' are provided.\78\

V. Reasons for the Proposed Amendments to the Impersonation Rule

    The Commission believes the proposed amendments set out in this 
SNPRM will improve its ability to combat impersonation fraud and could 
provide significant benefits to those harmed by impersonators, while 
strengthening deterrence against such fraud in the first instance. 
Further, the Rule as amended would not impose new burdens on honest 
individuals or businesses.

A. Need for and Objectives of the Proposed Amendments to the 
Impersonation Rule

    The Commission's objective for proposing these amendments to the 
Rule is to more effectively and efficiently redress consumers harmed by 
impersonation schemes and to more effectively address the types of 
unlawful impersonation affecting consumers.
1. Accessing Monetary Relief
    The Commission described in the ANPR and summarized in the NPRM how 
the 2021 U.S. Supreme Court decision in AMG \79\ changed the legal 
landscape and made it significantly more difficult for the Commission 
to obtain monetary relief, including consumer redress.\80\ Post-AMG, 
the Commission must rely in large part on section 19 of the FTC Act, 
which provides two paths for consumer redress. On the first path, 
following issuance of a complaint by the Commission, agency staff must 
litigate the case before an Administrative Law Judge through the 
agency's administrative process, leading to the Commission's issuance 
of a Final Decision.\81\ Following any reconsideration of the 
Commission's final decision and any subsequent appeal to a federal 
Court of Appeals, the Commission must then file a new case in federal 
district court and establish that the defendant engaged in fraudulent 
or dishonest conduct.\82\ With a rule in effect, the Commission may 
avail itself of the second, shorter, path and directly seek consumer 
redress through a federal court action.\83\ Thus, this SNPRM's proposed 
amendments covering impersonation of individuals \84\ and those who 
with knowledge provide the means and instrumentalities to others to 
engage in impersonation of business, government, or individuals would 
allow the Commission to proceed more efficiently and effectively to 
protect consumers and obtain monetary relief. Because the Commission 
can seek civil penalties for rule violations, the proposed rule also 
should achieve better deterrence against bad actors.\85\
2. Impersonation of Individuals and Other Entities Not Covered by 
Government and Businesses Impersonation Rule
    This SNPRM proposes to prohibit the deceptive impersonation of 
individuals and would address conduct that is prevalent and 
harmful.\86\ Extending the Rule to cover impersonation of individuals, 
real or fictitious, will allow the Commission to more effectively 
remedy harm caused to consumers by romance scams, e.g., scammers posing 
as individuals interested in a romantic relationship to extract money 
or sensitive information from consumers.\87\ The SNPRM also would 
provide a way to remedy other relationship-based scams, such as 
grandparent scams where scammers pose as a grandchild in need of 
immediate financial assistance in an attempt to extract money from the 
consumers.\88\
    Since issuance of the ANPR in December 2021, the FTC has received 
thousands to tens of thousands of complaints each quarter from 
consumers concerning romance scams or family and friend 
impersonations.\89\ According to data from complaints submitted to the 
Commission, the median dollar loss of consumers targeted by romance or 
family and friend impersonation ranged from $1,850 to $2,400 and $614 
to $800, respectively, in the quarters since publication of the 
ANPR.\90\ These types of impersonation scams have a significant impact 
on older consumers as well. As noted in the Commission's 2021-2022 
``Protecting Older Consumers'' report, in 2021, the highest aggregate 
dollar losses reported by older adults were in the romance scam 
category, with a total reported loss of $213 million.\91\ Further, the 
individual losses caused by romance scams are outsized compared to 
other types of scams reported by older consumers, including other 
impersonation scams: the reported individual dollar loss by adults age 
60 and over for romance scams was $5,100, compared to $658 for all 
fraud reports by consumers in that age group.\92\ In the Commission's 
2022-2023 ``Protecting Older Consumers'' report, the Commission found 
that ``[r]eported losses to romance scams by older adults increased 
13%, topping the record levels seen in 2021.'' \93\
    The revisions regarding impersonation of individuals proposed in 
this SNPRM will allow the

[[Page 15077]]

Commission to more effectively redress and protect consumers targeted 
by impersonation scams. Further, the SNPRM is designed to deter the 
perpetrators of such scams by exposing them to greater and more 
immediate monetary liability, including civil penalties.
3. Means and Instrumentalities
    The SNPRM's proposed means and instrumentalities provision \94\ 
would allow the Commission to more fully provide redress for those 
consumers who have been targeted by any impersonation scam where a 
party knew or had reason to know that the goods and services they 
provided will be used for the purpose of impersonations in violation of 
the Rule. The Commission took into consideration those comments in 
response to the NPRM that urged the proposed means and 
instrumentalities provision be revised to include a knowledge component 
and clarify the scope of the provision. Accordingly, this SNPRM 
proposes Sec.  461.5, ``Provision of Goods or Services for Unlawful 
Impersonation Prohibited,'' to clarify that ``means and 
instrumentalities'' liability attaches where a party provides goods and 
services used in impersonation in violation of the Impersonation Rule, 
and where that party has knowledge or reason to know that the goods or 
services the party provides will be used in impersonations of the kind 
that are themselves unlawful under the Rule.\95\ As with other Rule 
provisions this SNPRM's proposed Sec.  461.5 is designed to deter the 
perpetrators of such scams by exposing them to greater and more 
immediate monetary liability, including civil penalties.\96\

B. Overview and Scope of Proposed Amendments to the Impersonation Rule

    The Commission proposes four revisions to the Impersonation Rule in 
this SNPRM. Each proposed revision will be discussed in order. First, 
because amendment of the Rule as proposed by the SNPRM would prohibit 
impersonation of individuals as well as businesses and government, the 
SNPRM proposes to change the title of the Rule to read ``Rule on 
Impersonation of Government, Businesses, and Individuals.'' Second, 
this SNPRM proposes to add a definition of ``Individual'' in Sec.  
461.1 to mean ``a person, entity, or party, whether real or fictitious, 
other than those that constitute a business or government under this 
Part.'' The Commission proposes this definition of ``individual'' to 
make clear the type of impersonation that is prohibited by Sec.  461.4.
    Third, proposed Sec.  461.4, ``Impersonation of Individuals 
Prohibited,'' prohibits the impersonation of individuals in connection 
with commerce, as commerce is defined in the Federal Trade Commission 
Act (15 U.S.C. 44). This provision mirrors the existing prohibitions in 
Sec. Sec.  461.2 and 461.3, prohibiting impersonation of government and 
businesses, respectively. Those provisions themselves borrowed from 
existing rules and statutory definitions.\97\ As detailed in Section 
V.A.2. of this document, consumer complaints and the Commission's 
experience, as well as the comments and other evidence cited herein, 
are replete with examples of impersonation of individuals. The proposed 
prohibition in Sec.  461.4 would cover unlawful conduct by persons who 
misrepresent that they are or are affiliated with an individual, as 
defined in Sec.  461.1, including but not limited to: (1) calling, 
messaging, or otherwise contacting a person or entity while posing as 
an individual or affiliate thereof, including by identifying an 
individual by name or by implication; (2) sending physical mail through 
any carrier using addresses, identifying information, or insignia or 
likeness of an individual; (3) creating a website or other electronic 
service or social media account impersonating the name, identifying 
information, or insignia or likeness of an individual; (4) creating or 
spoofing an email address using the name of an individual; (5) placing 
advertisements, including dating profiles or personal advertisements, 
that pose as an individual or affiliate of an individual; and (6) using 
an individual's identifying information, including likeness or 
insignia, on a letterhead, website, email, or other physical or digital 
place.\98\
    Fourth, proposed Sec.  461.5, ``Provision of Goods or Services for 
Unlawful Impersonation Prohibited,'' makes it unlawful to provide goods 
or services with knowledge or reason to know that those goods or 
services will be used in impersonations of the kind that are themselves 
unlawful under the Rule. The NPRM proposed a similar provision, which 
referred to ``means and instrumentalities,'' but lacked a requirement 
to prove ``knowledge or reason to know.'' This SNPRM proposes modified 
language based on comments to the ANPR, NPRM, the informal hearing and 
the Commission's experience, which support the addition of the above-
mentioned knowledge requirement.
    As described in Section III.B., above, many commenters expressed 
concern or requested modification of the means and instrumentalities 
provision proposed in the NPRM. Some supportive commenters stated that 
the provision could be read too broadly.\99\ Other commenters argued 
that without a scienter or knowledge requirement, the proposed rule 
provision runs the risk of imposing strict liability against innocent 
and unwitting third-party providers.\100\ Accordingly, several 
commenters urged the Commission to clarify the scope of means and 
instrumentalities liability or explicitly include a knowledge 
requirement in the final rule provision.\101\
    The Commission has carefully considered the comments and all 
concerns and proposals expressed in them. As noted in the NPRM, some 
commenters suggested that the Commission impose liability on a broader 
set of actors, namely those who assist and facilitate violations.\102\ 
The Telemarketing Sales Rule (``TSR'') imposed assisting-and-
facilitating liability, a form of indirect liability authorized by the 
TSR's authorizing statue.\103\ Sections 5 and 18 of the FTC Act, which 
authorize this Rule, contain no such authorizing language. However, a 
long line of case law describes a form of direct liability for a party 
who, despite not having direct contact with the injured consumers, 
``passes on a false or misleading representation with knowledge or 
reason to expect that consumers may possibly be deceived as a result.'' 
\104\ In other words: ``One who places in the hands of another a means 
of consummating a fraud or competing unfairly in violation of the 
Federal Trade Commission Act is himself guilty of a violation of the 
Act.'' \105\ Accordingly, the Commission proposes, in Sec.  461.5, 
expressly to impose liability on those who provide goods or services 
with knowledge or reason to know that those goods or services will be 
used in impersonations of the kind that are themselves unlawful under 
the Rule.

C. The Rulemaking Process

    The Commission can decide to finalize this supplemental proposed 
rule if the rulemaking record, including the public comments in 
response to this SNPRM, supports such a conclusion. The Commission may, 
either on its own initiative or in response to a commenter's request, 
engage in additional processes, which are described in 16 CFR 1.12 and 
1.13. If the Commission on its own initiative decides to conduct an 
informal hearing, or if a commenter files an adequate request for such 
a hearing, then a separate notice will issue under 16 CFR 1.12(a). 
Based on the comment record

[[Page 15078]]

and existing prohibitions against impersonation of government and 
businesses under section 5 of the FTC Act, the Commission does not here 
identify any disputed issues of material fact necessary to be resolved 
at an informal hearing.The Commission may still do so later, on its own 
initiative or in response to a persuasive showing from a commenter, 
i.e., in response to data or other evidence demonstrating that there is 
a genuine, bona fide dispute over material facts that will affect the 
outcome of the proceeding.\106\

VI. Paperwork Reduction Act

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

VII. Preliminary Regulatory Analysis

    Under section 22 of the FTC Act, the Commission, when it publishes 
any NPRM, must include a ``preliminary regulatory analysis.'' 15 U.S.C. 
57b-3(b)(1). The required contents of a preliminary regulatory analysis 
are (1) ``a concise statement of the need for, and the objectives of, 
the proposed rule,'' (2) ``a description of any reasonable alternatives 
to the proposed rule which may accomplish the stated objective,'' and 
(3) ``a preliminary analysis of the projected benefits and any adverse 
economic effects and any other effects'' for the proposed rule and each 
alternative, along with an analysis ``of the effectiveness of the 
proposed rule and each alternative in meeting the stated objectives of 
the proposed rule.'' 15 U.S.C. 57b-3(b)(1)(A)-(C). This SNPRM already 
provided the concise statement of the need for, and the objectives of, 
this proposal in Item V.A above. It addresses the other requirements 
below.

A. Reasonable Alternatives and Anticipated Costs

    The Commission believes that the benefits of proceeding with these 
proposals will significantly outweigh the costs, but it welcomes public 
comment and data (both qualitative and quantitative) on any benefits 
and costs to inform a final regulatory analysis. Critical to the 
Commission's analysis is that these proposed amendments to the Rule 
would allow for monetary relief to victims of impersonations of 
individuals and also for the imposition of civil penalties against 
violators. Such results will provide benefits to consumers, as well as 
to the agency and its mission, without imposing any costs on consumers. 
It is difficult to quantify with precision all the benefits that would 
arise from amending the Impersonation Rule to include a prohibition on 
impersonation of individuals, but they can be described qualitatively.
    Consumers have reported 152,696 instances of family and friend 
impersonation and associated total losses of approximately $339 million 
from 2019 through 2023.\107\ For romance scams, from 2019 through 2023, 
consumers reported being defrauded of roughly $4.978 billion in 307,370 
incidents.\108\ In 2022, older adults reported a 13% increase in losses 
to romance scammers, surpassing the record losses reported in 
2021.\109\ Adopting the proposed amendments may make some of the losses 
experienced by future victims recoverable through consumer redress and 
also allow for the imposition of civil penalties.\110\
    While providing the means and instrumentalities for such scams is 
already illegal under section 5, civil penalties cannot be imposed 
without the proposed amendments. Adopting the proposed amendments may 
also have a deterrence effect on impersonation scams and those 
providing the means and instrumentalities for such scams. Deterring 
plainly illegal conduct is challenging. Scholarship on deterrence 
suggests that the potential severity of consequences, such as civil 
penalties, is less likely to influence behavior than the perceived 
likelihood of detection and punishment.\111\ Still, a rule that makes 
it less likely that impersonators and those providing the means and 
instrumentalities for such scams get to keep their ill-gotten gains and 
more likely that they have to pay civil penalties can have deterrence 
effects, whatever their magnitude. And the publicity around any 
eventual amendments to the Rule could have the salutary effect of 
complementing the Commission's consumer education work by elevating 
public awareness of these prevalent forms of fraud, which could 
increase how often they are detected and reported.

B. Regulatory Flexibility Act--Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act requires the Commission to prepare 
and make available for public comment an ``initial regulatory 
flexibility analysis'' (``IRFA'') in connection with any NPRM. 5 U.S.C. 
603. An IRFA requires many of the same components as section 22 of the 
FTC Act and the Paperwork Reduction Act. The IRFA must furthermore 
contain, among other things, ``a description of and, where feasible, an 
estimate of the number of small entities to which the proposed rule 
will apply.'' 5 U.S.C. 603(b)(3). This and other requirements do not 
apply, however, whenever ``the agency certifies that the rule will not, 
if promulgated, have a significant economic impact on a substantial 
number of small entities.'' 5 U.S.C. 605(b).
    The Commission certifies that the SNPRM will not have a significant 
economic impact on a substantial number of honest, small entities, and 
this document serves as notice to the Small Business Administration of 
the Commission's certification. Because the deceptive impersonation of 
individuals is already prohibited by section 5 of the FTC Act, and 
section 5 similarly makes unlawful providing the means and 
instrumentalities for a violation of section 5 of the Act, the SNPRM 
would not change the state of the law in terms of what is legal and 
what is illegal. Furthermore, the proposed amendments to the Rule would 
impose no recordkeeping requirement and would not create or impose any 
compliance costs. The main changes arise for entities violating section 
5 through the impersonation of individuals and by providing the means 
and instrumentalities for impersonations that would be unlawful under 
the Rule if this SNPRM is finalized as drafted. Adoption of the 
proposed amendments to the Rule would make such conduct a Rule 
violation in addition to being a section 5 violation. Such violators 
would no longer be immune from civil penalties for a first offence and 
could be ordered by a federal court to pay significant civil penalties 
and to provide redress to their victims. Adoption of the proposed 
amendments could, therefore, constitute a significant economic impact 
for law violators, but it is unlikely to affect a substantial number of 
small entities or individuals otherwise not engaging in conduct 
prohibited by section 5 or the SNPRM. The Commission believes that the 
vast majority of small entities and individuals do not deceptively 
impersonate individuals or knowingly

[[Page 15079]]

provide goods and services used in impersonating government, 
businesses, or individuals in a manner that would be unlawful under the 
provisions set out in this SNPRM. Furthermore, the Commission does not 
consider those small entities that are violating existing law to be 
among those Congress protected in enacting the additional procedural 
protections for small entities when agencies consider rulemaking.

VIII. Request for Comments

    Members of the public are invited to comment on any issues or 
concerns they believe are relevant or appropriate to the Commission's 
consideration of the SNPRM. The Commission requests that factual data 
or other evidence on which the comments are based be submitted with the 
comments, particularly if a commenter intends to dispute an issue of 
fact material to this rulemaking.\112\ In addition to the issues raised 
above, the Commission solicits public comment on the specific questions 
identified below. These questions are designed to assist the public and 
should not be construed as a limitation on the issues on which public 
comment may be submitted.

Questions

    (1) Should the Commission amend the Impersonation Rule to include a 
prohibition of impersonation of individuals? Why or why not?
    (2) Please provide comment, including relevant data, statistics, 
consumer complaint information, or any other evidence, on proposed 
Sec. Sec.  461.4 and 461.5. Regarding each provision, please include 
answers to the following questions:
    (a) How prevalent is the act or practice the provision seeks to 
address?
    (b) What is the provision's impact (including any benefits and 
costs), if any, on consumers, governments, and businesses, both those 
existing and those yet to be started?
    (c) What alternative proposals should the Commission consider?
    (3) Does the Rule, if amended as proposed by the SNPRM, contain a 
collection of information?
    (4) Would the Rule, if amended as proposed by the SNPRM, have a 
significant economic impact on a substantial number of small entities? 
If so, how could it be modified to avoid a significant economic impact 
on a substantial number of small entities?
    (5) The SNPRM proposes including in the amended Impersonation Rule 
a two-part prohibition against impersonation of individuals in Sec.  
461.4. Is this prohibition clear and understandable? Is it ambiguous in 
any way? How if at all should it be improved?
    (6) For purposes of prohibiting impersonation of individuals, 
should the Commission define ``individual'' to mean ``a person, entity, 
or party, whether real or fictitious, other than those that constitute 
a business or government under this part''? Is this definition clear 
and understandable? Is it ambiguous in any way? How if at all should it 
be improved?
    (7) The SNPRM proposes including in the amended Impersonation Rule 
a two-part prohibition in Sec.  461.5 against providing goods or 
services with knowledge or reason to know that those goods or services 
will be used to (a) materially and falsely pose as, directly or by 
implication, a government entity or officer thereof, a business or 
officer thereof, or an individual, 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, a business or officer thereof, or an individual, in or 
affecting commerce as commerce is defined in the Federal Trade 
Commission Act (15 U.S.C. 44). Should the Rule be revised to contain 
this prohibition against providing goods or services with knowledge or 
reason to know that those goods or services will be used to unlawfully 
impersonate a government, business, or individual? Why or why not? Is 
the standard ``know or have reason to know,'' which reflects current 
law, sufficiently clear and understandable? Is it ambiguous in any way? 
How, if at all, should it be improved?

IX. Comment Submissions

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 30, 2024. 
Write ``Impersonation SNPRM, R207000'' on your comment. Your comment--
including your name and your state--will be placed on the public record 
of this proceeding, including, to the extent practicable, on the 
website https://www.regulations.gov.
    Because of the agency's heightened security screening, postal mail 
addressed to the Commission will be subject to delay. We strongly 
encourage you to submit your comments online through the https://www.regulations.gov website. To ensure that the Commission considers 
your online comment, please follow the instructions on the web-based 
form.
    If you file your comment on paper, write ``Impersonation SNPRM, 
R207000'' on your comment and on the envelope, and mail your comment to 
the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex I), 
Washington, DC 20580. If possible, please submit your paper comment to 
the Commission by overnight service.
    Because your comment will be placed on the public record, you are 
solely responsible for making sure that your comment does not include 
any sensitive or confidential information. In particular, your comment 
should not contain sensitive personal information, such as your or 
anyone else's Social Security number; date of birth; driver's license 
number or other state identification number or foreign country 
equivalent; passport number; financial account number; or credit or 
debit card number. You are also solely responsible for making sure your 
comment does not include any sensitive health information, such as 
medical records or other individually identifiable health information. 
In addition, your comment should not include any ``[t]rade secret or 
any commercial or financial information which . . . is privileged or 
confidential''--as provided in section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including, in 
particular, competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c). 
In particular, the written request for confidential treatment that 
accompanies the comment must include the factual and legal basis for 
the request and must identify the specific portions of the comment to 
be withheld from the public record. See FTC Rule 4.9(c). Your comment 
will be kept confidential only if the General Counsel grants your 
request in accordance with the law and the public interest. Once your 
comment has been posted publicly at https://www.regulations.gov--as 
legally required by FTC Rule 4.9(b), 16 CFR 4.9(b)--we cannot redact or 
remove your comment, unless you submit a confidentiality request that 
meets the requirements for such treatment under FTC Rule 4.9(c), and 
the General Counsel grants that request.
    Visit the FTC website to read this document and the news release 
describing it and visit https://www.regulations.gov/docket/FTC-2024-0019 to read a plain-language summary of the proposed rule. The FTC Act 
and

[[Page 15080]]

other laws that the Commission administers permit the collection of 
public comments to consider and use in this proceeding as appropriate. 
The Commission will consider all timely and responsive public comments 
it receives on or before April 30, 2024. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

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

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

Endnotes

    \1\ Fed. Trade Comm'n, ANPR: Trade Regulation Rule on 
Impersonation of Gov't and Businesses, 86 FR 72901 (Dec. 23, 2021) 
(``ANPR''), https://www.federalregister.gov/documents/2021/12/23/2021-27731/trade-regulation-rule-on-impersonation-of-government-and-businesses.
    \2\ Fed. Trade Comm'n, Notice of Proposed Rulemaking: Trade 
Regulation Rule on Impersonation of Government and Businesses, 87 FR 
62741 (Oct. 17, 2022) (``NPRM''), https://www.federalregister.gov/documents/2022/10/17/2022-21289/trade-regulation-rule-onimpersonation-of-government-and-businesses.
    \3\ Fed. Trade Comm'n, Initial notice of informal hearing; final 
notice of informal hearing; request for public comment and speakers, 
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 (``Informal Hearing 
Notice'').
    \4\ 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 #). A copy of the transcript of the Informal Hearing 
and the comments submitted in response to this hearing can be found 
at: https://www.regulations.gov/docket/FTC-2023-0030/document.
    \5\ See Section III.D. of the SBP of the Impersonation Rule 
published elsewhere in this edition of the Federal Register; NPRM, 
87 FR at 62750.
    \6\ See https://www.regulations.gov/docket/FTC-2023-0030/comments.
    \7\ ANPR, 86 FR 72901.
    \8\ Id. at 72904.
    \9\ While the docket lists 169 comments, four of these were 
submitted by AVIXA, Inc. (``Audio Visual and Integrated Experience 
Association,'' collectively ``AVIXA ANPR Cmts.'') and two by the 
National Association of Attorneys General (``NAAG,'' collectively 
``NAAG ANPR Cmts.''), accounting for four total duplicates, while 
one comment was untimely filed eight months after the close of 
comments and only said ``no.'' See AVIXA ANPR Cmts., https://www.regulations.gov/comment/FTC-2021-0077-0089, https://www.regulations.gov/comment/FTC-2021-0077-0085, https://www.regulations.gov/comment/FTC-2021-0077-0126, https://www.regulations.gov/comment/FTC-2021-0077-0128; NAAG ANPR Cmts., 
https://www.regulations.gov/comment/FTC-2021-0077-0152, https://www.regulations.gov/comment/FTC-2021-0077-0164; Lucy Chen, Cmt. on 
ANPR (Oct. 21, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0171.
    \10\ See Pub'rs Clearing House, Cmt. on ANPR (Feb. 8, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0008; YouMail 
Inc., Cmt. on ANPR (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0148; WMC Global, Cmt. on ANPR (Feb. 22, 
2022), https://www.regulations.gov/comment/FTC-2021-0077-0154 (``WMC 
ANPR Cmt.''); DIRECTV, LLC, Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0167; Somos, Inc., Cmt. on 
ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0162 (``Somos ANPR Cmt.''); Microsoft Corp., Cmt. on ANPR (Feb. 
22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0135 
(``Microsoft ANPR Cmt.''); Apple, Inc., Cmt. on ANPR (Feb. 23, 
2022), https://www.regulations.gov/comment/FTC-2021-0077-0159 
(``Apple ANPR Cmt.''); Cotney Attorneys & Consultants, Cmt. on ANPR 
(Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0140; Erik M. Pelton & Associations, Consultants, Cmt. on ANPR (Feb. 
22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0156 
(``Pelton ANPR Cmt.''); Informa PLC, Cmt. on ANPR (Feb. 22, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0166.
    \11\ See Exhibitions & Conferences Alliances, Cmt. on ANPR (Feb. 
15, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0009; 
AVIXA, Inc., Cmt. on ANPR (Feb. 17, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0085 (``AVIXA ANPR 
Cmt.''); Experiential Designers & Producers Association, Cmt. on 
ANPR (Feb. 16, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0073; Association of Equipment Manufacturers, Cmt. on ANPR 
(Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0168); The American Apparel & Footwear Association, Cmt. on ANPR 
(Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0141; NCTA--The internet & Television Association, Cmt. on ANPR 
(Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0169; USTelecom, Cmt. on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0160 (``USTelecom ANPR 
Cmt.''); International Housewares Association, Cmt. on ANPR (Feb. 
22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0144; 
National Association of Broadcasters, Cmt. on ANPR (Feb. 22, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0146; CTIA, Cmt. 
on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0161; Consumer Tech. Ass'n, Cmt. on ANPR (Feb. 17, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0091.
    \12\ See Broward Cnty., Fla., Cmt. on ANPR (Feb. 16, 2022), 
https://www.regulations.gov/comment/FTC-2021-0077-0075; NAAG, Cmt. 
on ANPR (Feb. 23, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0164 (``NAAG ANPR Cmt.''); Nat'l Ass'n of State Charity 
Officials (``NASCO''), Cmt. on ANPR, at 1 (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0165.
    \13\ NAAG ANPR Cmt. at 8.
    \14\ WMC ANPR Cmt. at 4.
    \15\ WMC ANPR Cmt. at 4.
    \16\ See Barbara Lay Cmt. on ANPR (Feb. 18, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0109.
    \17\ See Mai Huynh Cmt. on ANPR (Feb. 22, 2022), https://www.regulations.gov/comment/FTC-2021-0077-0155.
    \18\ NAAG ANPR Cmt. at 8.
    \19\ Id. at 10.
    \20\ Apple ANPR Cmt.
    \21\ Gray markets ``allow consumers to sell physical and digital 
goods at a discounted price. Impersonators who have obtained stolen 
gift card funds utilize gray markets to sell items purchased with 
those funds to other consumers who may be unaware of the fraudulent 
source of the items they are purchasing.'' Id.
    \22\ See id.
    \23\ Id.
    \24\ Microsoft ANPR Cmt. at 6.
    \25\ See id.
    \26\ See Pelton ANPR Cmt. at 6-7.
    \27\ Id. at 6-7.
    \28\ USTelecom ANPR Cmt. at 3-4.
    \29\ Somos ANPR Cmt. at 3, 5.
    \30\ NPRM, 87 FR 62741.
    \31\ See id. at 62741-42.
    \32\ Id. at 62750.
    \33\ Fed. Trade Comm'n, Trade Regulation Rule on Impersonation 
of Government and Businesses, https://www.regulations.gov/docket/FTC-2022-0064/comments.
    \34\ Suhkvir Singh/Rutgers Law School Students, Cmt. on NPRM at 
1 (Nov. 22, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0019 (internal citation omitted).
    \35\ AIM, the European Brands Association, Cmt. on NPRM (Dec. 
13, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0041 
(``AIM NPRM Cmt.''); Recording Industry Association of America, Cmt. 
on NPRM (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0064 (``RIAA NPRM Cmt.'').

[[Page 15081]]

    \36\ AARP, Cmt. on NPRM at 2 (Dec. 14, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0043.
    \37\ Id. at 2.
    \38\ 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 at 5 (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0070 (``EPIC NPRM Cmt.'').
    \39\ Id. at iv-v.
    \40\ NCTA--The internet and Television Association, Cmt. on NPRM 
at 8 (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0071 (``NCTA NPRM Cmt.'').
    \41\ See 87 FR 62750; see also United States Patent and 
Trademark Office, Cmt. on NPRM (Dec. 2, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0026 (``USPTO NPRM 
Cmt.''); Anonymous, Cmt. on NPRM (Dec. 9, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0033 (``0033 NPRM Cmt.''); 
AIM NPRM Cmt.; Erik M. Pelton & Associates, PLLC, Cmt. on NPRM (Dec. 
14, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0045 
(``Pelton NPRM Cmt.''); NetChoice, Cmt. on NPRM (Dec. 15, 2022), 
https://www.regulations.gov/comment/FTC-2022-0064-0053 (``NetChoice 
NPRM Cmt.''); Messaging, Malware and Mobile Anti-Abuse Working 
Group, Cmt. on NPRM (Dec. 15, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0051 (``M3AAWG NPRM Cmt.''); Consumer 
Technology Association, Cmt. on NPRM (Dec. 16, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0063 (``CTA NPRM Cmt.''); 
NCTA NPRM Cmt.; American Society of Association Executives, Cmt on 
NPRM (Dec. 16, 2022), https://www.regulations.gov/comment/FTC-2022-0064-0057 (``ASAE NPRM Cmt.''); International Trademark Association, 
Cmt. on NPRM (Dec. 15, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0054 (``INTA NPRM Cmt.''); Somos NPRM Cmt.; CTIA, Cmt. 
on NPRM (Dec. 16, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0066 (``CTIA NPRM Cmt.''); U.S. Copyright Office, Cmt. on 
NPRM (Dec. 16, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0067 (``USCO NPRM Cmt.''); USTelecom--The Broadband 
Association, Cmt. on NPRM (Dec. 16, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0067 (``USTelecom NPRM 
Cmt.''); Exhibitions & Conference Alliance, Cmt. on NPRM (Dec. 16, 
2022) https://www.regulations.gov/comment/FTC-2022-0064-0060 (``ECA 
NPRM Cmt.''); RIAA NPRM Cmt.; American Bar Association Intellectual 
Property Law Section, Cmt. on NPRM (Dec. 16, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0061 (``ABA-IPL NPRM 
Cmt.''); Americans for Prosperity Foundation, Cmt. on NPRM (Dec. 16, 
2022) https://www.regulations.gov/comment/FTC-2022-0064-0062 (``AFPF 
NPRM Cmt.''); ZoomInfo Technologies LLC, Cmt. on NPRM (Dec. 16, 
2022) https://www.regulations.gov/comment/FTC-2022-0064-0079 (``Zoom 
NPRM Cmt.''); American Bankers Association, Cmt. on NPRM (Dec. 16, 
2022) https://www.regulations.gov/comment/FTC-2022-0064-0080; 
Coalition for Online Accountability, Cmt. on NPRM (Dec. 16, 2022) 
https://www.regulations.gov/comment/FTC-2022-0064-0074 (``COA NPRM 
Cmt.''); William MacLeod, Cmt. on NPRM (Dec. 16, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0078 (``MacLeod NPRM 
Cmt.''); Cindy Brown et. al, Cmt. on NPRM (Dec. 16, 2022) https://www.regulations.gov/comment/FTC-2022-0064-0077 (``Brown NPRM 
Cmt.'').
    \42\ USPTO NPRM Cmt. at 10; USCO NPRM Cmt. at 8; RIAA NPRM Cmt. 
at 3.
    \43\ USPTO NPRM Cmt. at 10; USCO NPRM Cmt. at 8; RIAA NPRM Cmt. 
at 3.
    \44\ 0033 NPRM Cmt.; ABA-IPL NPRM Cmt. at 2; Zoom NPRM Cmt. at 
1.
    \45\ ABA-IPL NPRM Cmt. at 1-2; NetChoice NPRM Cmt. at 2; 
USTelecom NPRM Cmt. at 2.
    \46\ NetChoice NPRM Cmt. at 2; CTA NPRM Cmt.; ASAE NPRM Cmt. at 
1; INTA NPRM Cmt.; Somos NPRM Cmt.; CTIA NPRM Cmt. at 7; USTelecom 
NPRM Cmt. at 2; ECA NPRM Cmt. at 3; ABA-IPL NPRM Cmt. at 3; Zoom 
NPRM Cmt. at 2; ABA NPRM Cmt. at 3.
    \47\ CTA NPRM Cmt. at 7.
    \48\ Id.; see also ASAE NPRM Cmt.
    \49\ Somos NPRM Cmt. at 2.
    \50\ USTelecom NPRM Cmt. at 2.
    \51\ USTelecom NPRM Cmt. at 2.
    \52\ Pelton NPRM Cmt. at 3 (emphasis in original).
    \53\ ABA-IPL NPRM Cmt. at 3.
    \54\ CTIA NPRM Cmt at 7.
    \55\ NCTA NPRM Cmt. at 2.
    \56\ M3AAWG NPRM Cmt. at 10.
    \57\ Brown NPRM Cmt. at 8.
    \58\ M3AAWG NPRM Cmt. at 3.
    \59\ COA NPRM Cmt. at 3; M3AAWG NPRM Cmt. at 4-5. ``WHOIS data'' 
is a commonly used internet record listing that identifies who owns 
a domain and how to contact them.
    \60\ AFPF NPRM Cmt. at 2.
    \61\ AFPF NPRM Cmt. at 5-6.
    \62\ Id. at 8.
    \63\ MacLeod NPRM Cmt. at 2.
    \64\ Id.
    \65\ Informal Hearing Notice, 88 FR 19024.
    \66\ 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.
    \67\ American Bankers Association, May 2023 Tr at 39-40.
    \68\ 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; INCOMPAS, May 2023 Tr at 42, 44; NCTA, May 2023 Tr at 
51-52.
    \69\ William MacLeod, Cmt. on Informal Hearing Notice at 7 (Apr. 
14, 2023) https://www.regulations.gov/comment/FTC-2023-0030-0019.
    \70\ MacLeod, May 2023 Tr at 27.
    \71\ CTA, May 2023 Tr at 16.
    \72\ USTelecom, May 2023 Tr at 30.
    \73\ Chilson, May 2023 Tr at 34.
    \74\ Voice on the Net Coalition, May 2023 Tr at 36.
    \75\ Id. at 36.
    \76\ INCOMPAS, May 2023 Tr at 42, 44.
    \77\ NCTA, The internet & Television Assoc., May 2023 Tr at 51.
    \78\ Id. at 51-52.
    \79\ See AMG Cap. Mgmt., LLC v. FTC, 141 S. Ct. 1341, 1352 
(2021).
    \80\ See ANPR, 78 FR at 72902 & n.24 (discussing AMG Cap. 
Mgmt.); NPRM, 87 FR at 62746.
    \81\ In July 2023, the Commission amended its rules of practice 
for adjudicative proceedings. See 88 FR 42872 (July 5, 2023). 
Following those amendments, administrative law judges presiding over 
an administrative hearing issue a recommended decision, rather than 
an initial decision as previously issued. Id. at 42873. The 
Commission then automatically reviews the decision and either 
affirms in full or rejects, in whole or in part, and issues its own 
decision, which is final. Id. These rules changes do not impact the 
requirements under section 19.
    \82\ See 15 U.S.C. 57b(a)(2) (``If the Commission satisfies the 
court that the act or practice to which the cease and desist order 
relates is one which a reasonable man would have known under the 
circumstances was dishonest or fraudulent, the court may grant 
relief.'').
    \83\ Compare 15 U.S.C. 57b(a)(1) (rule violations), with id. 
57b(a)(2) (section 5 violations).
    \84\ As noted in the NPRM, the Commission's Telemarketing Sales 
Rule, Mortgage Assistance Relief Services Rule, and R-Value Rule 
expressly prohibit deception by way of impersonation and allow for 
direct pursuit of section 19 remedies in federal court, including 
civil penalties and consumer redress, in specific contexts. However, 
the Impersonation Rule does not reach individuals.
    \85\ NPRM, 87 FR at 62749.
    \86\ See, e.g., Protecting Older Consumers 2021-2022, Federal 
Trade Commission at 32 (Oct. 18, 2022), available at https://www.ftc.gov/system/files/ftc_gov/pdf/P144400OlderConsumersReportFY22.pdf.
    \87\ See, e.g., Protecting Older Consumers 2022-2023, Federal 
Trade Commission (Oct. 18, 2023) at 30-31, available at https://www.ftc.gov/system/files/ftc_gov/pdf/p144400olderadultsreportoct2023.pdf.; Federal Trade Commission, What 
to Know About Romance Scams (Aug. 2022), available at https://consumer.ftc.gov/articles/what-know-about-romance-scams; Federal 
Bureau of Investigation, Scammers Defraud Victims of Millions of 
Dollars in New Trend in Romance Scams, Alert No. I-091621-PSA (Sept. 
16, 2021), available at https://www.ic3.gov/Media/Y2021/PSA210916.
    \88\ See, e.g., AARP, Grandparent Scams (updated Sept. 30, 
2022), available at https://www.aarp.org/money/scams-fraud/info-2019/grandparent.html; Federal Trade Commission, Don't Open Your 
Door To Grandparent Scams, Consumer Alert (Apr. 13, 2021), available 
at https://consumer.ftc.gov/consumer-alerts/2021/04/dont-open-your-door-grandparent-scams.

[[Page 15082]]

    \89\ Federal Trade Commission, Fraud Reports, Tableau Public, 
available at https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/Subcategories Over Time 
(filtered to display: Complaint Source--All; Timeframe--Quarters; 
Category--Imposter Scams; View--Table; Year-Quarter--2022, Q1 
through 2023, Q4 selected; Subcategory--(All)) (last visited 
February 2024).
    \90\ Federal Trade Commission, Fraud Reports, Tableau Public, 
available at https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/Subcategories Over Time 
(filtered to display: Complaint Source--All; Timeframe--Quarters; 
Category--Imposter Scams; View--Table; Year-Quarter--2022, Q1 
through 2023, Q4 selected; Subcategory--(All)) (last visited 
February 2024).
    \91\ Protecting Older Consumers 2021-2022, Federal Trade 
Commission (Oct. 18, 2022) at 32, available at https://www.ftc.gov/system/files/ftc_gov/pdf/P144400OlderConsumersReportFY22.pdf.
    \92\ Id. at 29 n.104.
    \93\ Protecting Older Consumers 2022-2023, Federal Trade 
Commission (Oct. 18, 2023) at 31, available at https://www.ftc.gov/system/files/ftc_gov/pdf/p144400olderadultsreportoct2023.pdf. While 
the reported harm is significant, the actual amount of harm is 
likely significantly higher due to underreporting by consumers. Id. 
at 39-40.
    \94\ ``Means and instrumentalities'' liability is a form of 
direct liability. See, e.g., FTC v. Magui Publishers, Inc., No. Civ. 
89-3818RSWL(GX), 1991 WL 90895, at *14 (C.D. Cal. Mar. 28, 1991), 
aff'd, 9 F.3d 1551 (9th Cir. 1993) (``One who places in the hands of 
another a means or instrumentalities to be used by another to 
deceive the public in violation of the FTC Act is directly liable 
for violating the Act.''); Regina Corp. v. FTC, 322 F.2d 765, 768 
(3rd Cir. 1963). ``Means and instrumentalities'' is distinct from 
``aiding and abetting'' liability and ``assisting and facilitating'' 
liability, both of which are secondary forms of liability and not 
available to the Commission in this rulemaking. See Andrew Smith, 
Multi-party liability, FTC Business Blog (Jan. 29, 2021), https://www.ftc.gov/business-guidance/blog/2021/01/multi-party-liability 
(noting various legal theories used by the Commission to impose 
liability on additional parties where the primary target's 
customers, vendors, or business partners were also engaged in 
misconduct). The Commission observes that it does not always allege 
knowledge in complaints seeking to hold parties liable for providing 
the means and instrumentalities used in a section 5 violation. See, 
e.g., Amended Complaint for Permanent Injunction and Other Equitable 
Relief, FTC v. James D. Noland, Jr., et al., case no. 2:20-cv-00047-
DWL (D. Az. Jan. 17, 2020); Complaint for Permanent Injunction and 
Other Equitable Relief, FTC v. Cyberspy Software, LLC, et al., case 
no. 6:08-cv-01872-GAP-GJK (M.D. Fl. Nov. 5, 2008); Complaint for 
Injunctive and Other Equitable Relief, FTC v. Five Star Auto Club, 
Inc., et al., case no. 99-civ-1693 (S.D.N.Y. March 8, 1999).
    \95\ The Commission notes that if adopted as final, the SNPRM's 
proposed Sec.  461.5 would not be the first trade regulation rule 
promulgated by the Commission that includes a ``knew or had reason 
to know'' requirement. For example, Sec.  460.8 of the Labeling and 
Advertising of Home Insulation, R-value tolerances, prohibits non-
manufacturers of home insulation to rely on R-value data provided by 
the manufacturer they ``know or should know'' is false or not based 
on proper tests. 16 CFR 460.8; see also 16 CFR 460.19(e) (non-
manufacturers are liable only if they ``know or should know that the 
manufacturer does not have a reasonable basis for the claim''); 16 
CFR 436.7(d) (franchise sellers must notify prospective franchisees 
of any material changes ``that the seller knows or should have known 
occurred'').
    \96\ NPRM, 87 FR at 62749.
    \97\ See id.
    \98\ These examples, which are the same as those articulated in 
connection with the prior rules (see Section III of the Statement of 
Basis and Purposes published elsewhere in this issue of the Federal 
Register), make clear that the use of voice cloning for purposes of 
impersonation is covered where its use satisfies the Rule's 
prohibitions. 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.
    \99\ 0033 NPRM Cmt.; ABA-IPL NPRM Cmt. at 2; Zoom NPRM Cmt. at 
1.
    \100\ ABA-IPL NPRM Cmt. at 1-2; NetChoice NPRM Cmt. at 2; 
USTelecom NPRM Cmt. 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.
    \101\ NetChoice NPRM Cmt. at 2; CTA NPRM Cmt.; ASAE NPRM Cmt. 1; 
INTA NPRM Cmt.; Somos NPRM Cmt.; CTIA NPRM Cmt. at 7; USTelecom NPRM 
Cmt. at 2; ECA NPRM Cmt. at 3; ABA-IPL NPRM Cmt. at 3; Zoom NPRM 
Cmt. at 2; ABA NPRM Cmt. 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.
    \102\ See supra, n.94, n.95.
    \103\ See 15 U.S.C. 6102(a)(2) (``acts or practices of entities 
or individuals that assist or facilitate deceptive telemarketing'').
    \104\ In re Shell Oil Co., 128 F.T.C. 749, 764 (1999) (statement 
of Chairman Pitofsky and Commissioners Anthony and Thompson, citing 
Regina Corp. v. FTC, 322 F.2d 765, 768 (3rd Cir. 1963)). See also, 
e.g., FTC v. Five-Star Auto Club, 97 F. Supp. 2d 502 (S.D.N.Y. 
2000); FTC v. Magui Publishers, Inc., No. Civ. 89-3818RSWL(GX), 1991 
WL 90895, at *14 (C.D. Cal. Mar. 28, 1991), aff'd, 9 F.3d 1551 (9th 
Cir. 1993); supra n.94.
    \105\ C. Howard Hunt Pen Co. v. FTC, 197 F.2d 273, 281 (3d Cir. 
1952). See also supra n.94.
    \106\ In the context of an informal hearing, ``disputed'' and 
``material'' are given the same meaning as in the standard for 
summary judgment. See Fed. Trade Comm'n, Initial notice of informal 
hearing; final notice of informal hearing; list of Hearing 
Participants; requests for submissions from Hearing Participants, 88 
FR 85525, 85527 (Dec. 8, 2023), https://www.federalregister.gov/documents/2023/12/08/2023-26946/negative-option-rule (citing H.R. 
REP. No. 93-1107, 93d Cong., 2d Sess., reprinted in [1974] U.S. CODE 
CONG. & AD. NEWS 7702, 7728; Anderson v. Liberty Lobby, Inc., 477 
U.S. 242, 248 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio 
Corp., 475 U.S. 574, 586 (1986)).
    \107\ Federal Trade Commission, Fraud Reports, Tableau Public, 
available at https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/Subcategories Over Time 
(filtered to display: Complaint Source--All; Timeframe--Years; 
Category--Imposter Scams; View--Table; Subcategory--(All)) (last 
visited February 2024).
    \108\ Federal Trade Commission, Fraud Reports, Tableau Public, 
available at https://public.tableau.com/app/profile/federal.trade.commission/viz/FraudReports/Subcategories Over Time 
(filtered to display: Complaint Source--All; Timeframe--Years; 
Category--Imposter Scams; View--Table; Subcategory--(All)) (last 
visited February 2024).
    \109\ Protecting Older Consumers 2022-2023, Federal Trade 
Commission (Oct. 18, 2023), available at https://www.ftc.gov/system/files/ftc_gov/pdf/p144400olderadultsreportoct2023.pdf.
    \110\ While such relief could also be obtained with an existing 
rule, such as the TSR if applicable, by no means do all 
impersonation scams implicate an existing rule, and there is no 
reason to expect them all to do so in the future.
    \111\ See, e.g., Aaron Chalfin & Justin McCrary, Criminal 
Deterrence: A Review of the Literature, 55 J. Econ. Lit. 5 (2017), 
https://doi.org/10.1257/jel.20141147 (reviewing twenty years of 
studies, albeit in criminal rather than civil context, and finding 
stronger evidence for deterrent effect of perceived risk of 
detection than for severity of punishment).
    \112\ See supra n.106 and accompanying text.

List of Subjects in 16 CFR Part 461

    Consumer protection, Impersonation, Trade Practices.

    Accordingly, the Federal Trade Commission proposes to amend 16 CFR 
part 461 as follows:

PART 461--RULE ON IMPERSONATION OF GOVERNMENT, BUSINESSES, AND 
INDIVIDUALS

0
1. The authority citation for part 461 continues to read as follows:

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

0
2. Revise the heading of part 461 to read as set forth above.
0
3. In Sec.  461.1, add the definition of ``individual'' in alphabetical 
order to read as follows:


Sec.  461.1   Definitions.

* * * * *

[[Page 15083]]

    Individual means a person, entity, or party, whether real or 
fictitious, other than those that constitute a business or government 
under this Part.
* * * * *
0
4. Add Sec.  461.4 to read as follows:


Sec.  461.4   Impersonation of Individuals 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, an 
individual, 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, an 
individual, in or affecting commerce as commerce is defined in the 
Federal Trade Commission Act (15 U.S.C. 44).
0
5. Add Sec.  461.5 to read as follows:


Sec.  461.5  Means and Instrumentalities: Provision of Goods or 
Services for Unlawful Impersonation Prohibited.

    It is a violation of this part, and an unfair or deceptive act or 
practice to provide goods or services with knowledge or reason to know 
that those goods or services will be used to:
    (a) materially and falsely pose as, directly or by implication, a 
government entity or officer thereof, a business or officer thereof, or 
an individual, 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, a business or officer thereof, or an 
individual, 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.
[FR Doc. 2024-03793 Filed 2-29-24; 8:45 am]
BILLING CODE 6750-01-P