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NAFCU, trades urge protections against impersonation scams
NAFCU joined with several other financial services industry trades to urge the Federal Trade Commission (FTC) to swiftly finalize a rule prohibiting entities from impersonating government, financial institutions and other legitimate businesses, and their officials. In addition, the groups asked for clarification in the final rule that if an impersonation scam uses a payment service, the financial institution is not held liable as it has no knowledge of the nefarious activity.
In the letter, the trade groups explain that “[b]ad actors regularly impersonate banks, credit unions, and other financial service providers,” as well as other legitimate businesses by “spoofing” phone numbers of these entities – where the call recipient’s caller ID displays the name of the legitimate business instead of the name of the fraudster actually calling.
While the FTC’s proposed rule would prohibit impersonation, it would also prohibit voice service providers from providing the bad actors with the “means and instrumentalities” to do so. The trades urge the FTC to hold the bad actors and entities that allow the scam to take place accountable, referencing the efforts of the Federal Communications Commission (FCC) to implement the STIR/SHAKEN call authentication framework. They also call for more to be done to prevent mobile applications from being used as tools to spoof outbound phone numbers.
As impersonation scams often result in financial payment to the bad actor, the groups ask for the FTC “to state clearly [in the final rule] that the mere provision of a payment service that is used by a bad actor to perpetrate the unlawful impersonation of a government or business would not constitute providing the ‘means and instrumentalities’ of the unlawful impersonation.”
“When a financial institution that provides a payment service has no knowledge or reason to expect that its customer is using the payment service to unlawfully impersonate a government or business, the institution is not providing the means or instrumentalities for the impersonation,” they state.
NAFCU has long supported efforts to crackdown on illegal robocalls, as well as illegal spoofing, to protect consumers. The association has advocated for clear guidance to ensure credit unions can continue to contact their members with important financial information, while minimizing the blocking and mislabeling of legitimate calls.