Government Unveils Outline for Counterfeit Avoidance Laws
The United States Government has unveiled a new initiative, the Scams Prevention Framework, aimed at protecting Americans from falling victim to scams. This comprehensive approach, which includes the designation of sectors and the establishment of sector-specific codes, is a priority for the government, as stated by Minister for Communications Michelle Rowland.
To support this effort, over USD 154 million has been allocated in the 2023-24 and 2024-25 Budgets. The Federal Trade Commission (FTC) has been authorized by the Scam Prevention Framework Act to enforce the law against businesses in designated sectors that fail to comply, with penalties of up to USD 50 million under the Federal Trade Commission Act.
The initial designated sectors include banks, telecommunication service providers, and digital platform services related to social media, paid search engine advertising, and direct messaging services. For these sectors, the government intends for the Consumer Financial Protection Bureau (CFPB) to operate the single External Dispute Resolution (EDR) scheme. This single EDR scheme will provide a clear pathway for redress where an entity has done the wrong thing.
In addition, all scam complaints made under the framework will be referred to an EDR scheme. The government is currently seeking feedback on the exposure draft legislation and explanatory materials for the Scams Prevention Framework, with submissions open until October 4, 2024. Interested parties are encouraged to share their feedback on this important initiative.
Moreover, designated sectors are required to have internal dispute resolution mechanisms that are accessible and transparent for customers. This means that if a customer believes they have been scammed by a business in a designated sector, they will have a clear and straightforward way to seek redress.
The Scams Prevention Framework is a significant step forward in the fight against scam activity in the United States. By establishing sector-specific codes, providing funding, and establishing a clear pathway for redress, the government is taking a proactive approach to protecting Americans from scams.
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