April 17, 2024

FTC Finalizes Government and Business Impersonation Rule

FTC Finalizes Government and Business Impersonation Rule

Illegal robocalls have pestered consumers for years, and while federal legislation has helped curb the problem, new issues continue to arise. This illegal activity has cost billions of dollars worldwide.

Recently, AI impersonation scams have come into the spotlight, and efforts to protect consumers from them have increased. These calls use artificial intelligence to defraud the public by mimicking the voices of politicians, celebrities, and business representatives. The FTC recently proposed and adopted a new rule to help safeguard businesses, government organizations, and consumers from these threats.

Government and Business Impersonation Rule

The new rule is effective April 1, 2024, and it “. . . prohibits the impersonation of government, businesses, and their officials or agents in interstate commerce.” The Federal Trade Commission enacted this law to combat impersonation scams, most commonly government and business impersonators. The FTC believes this final rule will curb fraudulent practices “consistent with applicable law.”

What are AI Impersonation Scams?

AI impersonation scams can fool even skeptical consumers because people tend to trust their ears. Recently, voters received a fraudulent robocall using an AI-generated version of President Biden’s voice, urging them not to vote. A political operative admitted to commissioning the call to serve their personal agenda. This incident is especially frightening in an election year when people might receive political calls daily.

Vocal cloning is effective in the business world as well. Criminals can use the technology to impersonate a CEO’s voice and order an employee to write a check, transfer funds, or sell assets. Consumers might receive a call with a familiar voice from a “local company” and send a payment to scammers as a result. Someone impersonating a celebrity can claim to be working for a charity. AI technology can also alter voices to remove accents and generate content in real time. When weaponized in this way, AI voice cloning is a dangerous development.

Scammers Impersonate FTC Employees

The current effort is personal for the FTC. Scammers have been impersonating its employees to trick or coerce consumers into sending them money. In 2023, the FBI received more than 14,000 complaints about scammers impersonating government employees, resulting in losses nearing $400 million.

To protect consumers, the FTC published guidelines for identifying these scams. The callers may ask you to move your money to protect it, request that you reveal a verification code, warn of suspicious activity on your Amazon account, or direct you to visit a Bitcoin ATM. These are all common impersonation scams that should trigger you to hang up. These callers are after your money.

Remember, the FTC will never ask anyone to pay them by cryptocurrency, bank or wire transfer, or gift card. When in doubt, terminate the call and contact the organization directly. Then, you can get an accurate status of your accounts.

How Businesses Can Protect Customers

Consumers are under siege by sophisticated criminals. AI impersonation scams have become a powerful way to defraud consumers. In this age, businesses must take the necessary steps to protect their customers. Sadly, scammers will find more and more creative ways to defraud consumers as technology advances. Taking the following steps will help keep your customers safe.

  • Vigilantly monitor caller ID to detect call spoofing attempts or fraudulent activity. You need to promptly detect the scammers to limit the damage they do to consumers and your company’s reputation.
  • Apply know-your-customer (KYC) rules to vetting your customers who want to access software or services from your company. Don’t allow bad actors to utilize your company tools to target consumers.
  • Inform customers early of any data breaches or potential threats. Your company may suffer blowback in the press and from consumers, but openly facing the problem and mitigating it is the best course of action.
  • Abide by the latest compliance and security standards. These guidelines and laws change frequently, so you need to monitor developments daily and quickly alter your policies as needed.

By safeguarding your customers, you protect them from financial loss while preserving your company’s reputation. Your company’s success depends on these efforts.

Government and Business Impersonation Rule Helps Your Business

You are certainly frustrated by the seemingly endless battle against fraudsters in the telecommunication industry. In recent years, government action has been like a game of Whack-A-Mole. Every new containment measure is followed by new illegal schemes based on sophisticated technology. Thankfully, some developments offer reasons for hope.

The FTC Government and Business Impersonation Rule was promptly adopted by the agency once the magnitude of the threat became clear. Government agencies have embraced stronger cooperation with each other and with individual states. The global effort is also strengthening with Canada and the EU also focused on these robocall scams.

The best way to protect your customers is to stay vigilant, monitor your caller ID, follow best industry practices, and educate the public. A savvy consumer is a voice impersonator’s worst nightmare.