I used to read a lot of TV show recaps that were touted as “We watch so you don’t have to.” Little did I know that same concept would apply to these new public meetings of the Federal Trade Commission (FTC) and that I would be the one recapping. The meetings aren’t quite must-see TV, but I keep coming back for more – much like at the Caesar’s Palace buffet.
So the theme for Episode Six – I mean the sixth public meeting – is imposters, which unfortunately has nothing to do with Among Us. But in the real world of consumer protection enforcement, imposters are a pretty important thing to consider. Law enforcement actions have challenged companies that allegedly falsely implied affiliation with the U.S. Citizenship and Immigration Services, with well-known tech companies and sometimes with the FTC itself. Imposters do real harm to consumers and also sully the good name of the entity they are impersonating. And for many years, the FTC and other law enforcement agencies have provided the public with really helpful information about avoiding imposter scams.
But does the FTC need to initiate a rulemaking about imposters? If it does, how should such a rule be framed? To set the stage, just a few days before the meeting kicked off, the FTC quietly issued a Statement of Regulatory Priorities, which set forth an exceedingly broad swath of rulemakings that the agency may kick off in 2022, from rules defining certain unfair methods of competition to rules about security practices and “intrusive surveillance.” Not all of the commissioners are on board with this broad agenda, with Commissioner Wilson’s dissent describing it as “the foundation for an avalanche of problematic rulemakings” and Commissioner Phillips succinctly stating, “This will not end well: not for the competition and consumers we are charged to protect, not for the businesses within our jurisdiction, and not for the FTC.”
So what transpired at the actual event? Well, despite the concerns raised above about rulemaking, this is at least a potential rulemaking that all four commissioners could support initiating. The meeting started with an FTC staff attorney describing the agency’s history with impersonation scams and the amount of harm it causes and emphasizing that a significant number of the impersonations are occurring in contexts that are not subject to current rules. Frequent readers know that means the U.S. Supreme Court decision in AMG could make it difficult for the agency to recover funds if it challenges some impersonation scams in federal court. And that’s a problem that appears to have inspired the 4-0 vote.
Commissioner Slaughter discussed scammers who impersonated her when she was acting chair in an effort to steal COVID-19 relief funds from consumers. Commissioner Phillips noted that he has been concerned that the agency was turning away from fraud enforcement and also noted the recent decline in complaints being issued from the agency. And Commissioner Wilson made it clear that although this rule is worthy of being initiated, the broad “rule-a-palooza” described in the Statement of Regulatory Priorities is hugely problematic. And she asked folks to check out her dissent, linked above. Chair Khan noted that government and business impersonation schemes have “skyrocketed during the pandemic” and were targeting seniors, communities of color and small businesses.
And I would be remiss if I didn’t have at least a few words to say about the public comment portion of the show, and of course the continued rigorous oversight of time limits by the FTC’s awesome head of public affairs. (And I know that sounds absolutely sarcastic, but I swear it isn’t intended as such – she is the best.) A smaller-than-usual number of participants addressed issues including impersonation fraud and the FTC’s recently launched supply chain study.
And for my closing thoughts, I will reiterate Commissioner Phillips’ point. I too have been concerned that, up until now, the new FTC leadership has been pretty quiet about the agency’s fraud work, causing many to wonder whether the agency would decrease its traditional fraud focus. It remains to be seen, but I certainly hope agency leadership realizes how important it is for the agency to continue to be a leader in tackling fraud. But let’s set expectations about this rulemaking: despite the controversial streamlining of FTC rulemaking, there is a long, long road ahead for this rulemaking. And if you are interested in the rulemaking, you can find background information and questions that will help frame the issues here. And trust me – your comments in rulemakings are reviewed closely by FTC staff.