The Federal Trade Commission (FTC) approved an important amendment to its Telemarketing Sales Rule (TSR) to incorporate new protections that allow it to take enforcement actions against new forms of fraud that have emerged lately.

These sophisticated new schemes are targeting older citizens systematically and have caused them significant financial losses and emotional distress. Recent reports from the agency highlighted that consumers aged 60 or older are more likely to fall prey to what they deem as “technical support scams” than younger individuals.

Their findings indicate that this group lost at least $175 million as a result of these deceptive practices. The agency is outraged by this breach of trust and profound violation of the personal security of this vulnerable group of American society.

Older individuals tend to be less familiar with how a simple phone call can be used to extract sensitive data, and they are typically more inclined to believe that the person on the other side is who they say they are.

Understanding the Mechanics of Tech Support Scams

Technical scams consist of a mix of social engineering and well-calculated manipulative tactics that put pressure on targets to make payments for services that are entirely made up.

Scammers have a wide range of tools in their arsenal to make sure that they sound credible to the person on the other side of the phone like pop-up alerts, misleading notifications, fabricated email correspondence, and carefully crafted interactions that seek to convince consumers that their devices may be infected with malware or are experiencing dangerous technical issues.

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Criminals seek to exploit certain human reactions like fear, uncertainty, and doubt to generate anxiety in the target and prompt them to bypass all defense mechanisms and suspicion. Their goal is to persuade them that their personal data may be compromised and that they need technical assistance immediately to protect themselves.

The scammers create a sense of immediate urgency and suggest that an imminent digital catastrophe can only be averted through their immediate intervention.

After the scammers manage to gain the target’s trust, they typically offer technical services that aim to solve the weaknesses and issues that their devices are allegedly experiencing. In addition, the target is prompted to make payments by using alternatives that reduce their right to claim a refund to the minimum.

Some of the preferred options for fraudsters to this end include cryptocurrency, gift cards, and wire transfers – most of which are non-refundable payment methods. Sometimes, they even tell victims to put cash in a box and mail it to them.

New Rules Give FTC Permission to Take Action On Inbound Calls

The amendment made to the FTC’s Telemarketing Sales Rule expands the agency’s scope and reach to inbound calls. Before this modification, the FTC was only able to take action against companies that made calls to consumers to sell these unneeded technical support packages.

However, these companies have bypassed these rules by bombarding their targets with digital adverts, pop-up notifications, and direct emails that claim to have identified security weaknesses within the person’s devices. This legal loophole allowed them to escape the FTC’s radar.

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Moving forward, the agency now has the legal capacity to address technical support scams involving inbound calls made by the target to the fraudsters.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, emphasized the importance of these changes, stating: “The Commission will not sit idle as older consumers continue to report tech support scams as a leading driver of fraud losses.”

The Timing for This New Rule Became the Subject of Debate Among Commissioners

The definition of technical support has now been changed to include “any plan, program, software, or service that is marketed to repair, maintain, or improve the performance or security of any device on which code can be downloaded, installed, run, or otherwise used.”

This expanded definition would give the FTC authority to take action against fraudsters targeting a much wider range of devices such as computers, smartphones, tablets, and smart home products.

They aim to close the gap to the point that a new technological platform is now outside their scope.

The Commission’s vote to approve these modifications was decisive as it was passed with a 4-1 vote. The strong support received by this amendment by the agency’s leadership highlights the urgency of these changes to protect vulnerable groups.

Commissioner Andrew Ferguson was the only official to oppose the rule as he believes that no new rule should have been passed at the moment considering that the Biden and Trump administration are going through the customary transition period.

“I will vote against all new rules not required by statute, and any enforcement action that advances an unprecedented theory of liability until that transition is complete,” Ferguson emphasized.

However, Commissioner Melissa Holyoak justified the measure by stating that it is not new to “lawfully amend the longstanding, bipartisan TSR—which Congress, not the current Chair, decided the Commission should promulgate and enforce—to cover an ongoing and increasing threat to some of the most vulnerable in America.”

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She further stressed that although this could be considered “new policy” by some groups, the measure is “entirely consistent with President-elect Trump’s past aggressive anti-fraud policies, along with his “relentless commitment to keep America’s seniors safe.”

Most provisions of the new rule will become effective 60 days after they are published in the Federal Register.

Nearly 18,000 Victims Were Reportedly Affected by Tech Support Scams in 2023

This new rule from the FTC is part of an ongoing combat against practices that employ sophisticated methods to target older citizens and other vulnerable groups of American society.

It follows the creation of the Do Not Call Registry in 2003 and additional modifications that sought to address schemes that relied heavily on pre-recorded calls and other high-pressure practices.

The timing to pass this new rule is particularly important as the FBI has revealed the severity of the issue. A study from the Bureau uncovered that technical support scams are the most frequently reported method used to defraud these individuals. The number of victims affected by these schemes neared 18,000 by 2023.

These amendments represent a critical step toward protecting some of the most vulnerable consumers from increasingly complex digital fraud schemes.

The rule changes also reflect a broader recognition of the evolving nature of technological fraud. As digital platforms become more complex and scammers become more sophisticated, regulatory bodies must continuously adapt to protect consumers.

This proactive approach demonstrates the FTC’s commitment to staying ahead of the curve when it comes to emerging fraudulent techniques and protecting the most vulnerable members of our society.