Software technology trade groups have expressed concern over the Federal Trade Commission’s proposed rule that would impose liability on companies that, knowingly or otherwise, facilitate impersonation scams. This proposed regulation takes aim at firms with the ‘knowledge or reason to know’ that a customer will utilise their goods or services to conduct such a scam.
Expressing their concerns to the FTC, the Financial Technology Association stated that while the intention of the rule is to prevent companies that supply goods or services from being strictly liable, the rule currently lacks clarity. They further mentioned their fear that the ambiguity in its interpretations could lead to ‘legitimate firms’ facing ‘inappropriate penalties’.
These recent comments spotlight the potential implications this regulation could bear on the technology sector and the need for clarifications to prevent collateral damage.
For those interested in diving deeper into the commentary expressed by the software technology trade groups, we recommend reviewing the Financial Technology Association’s statements further reported on in the National Law Journal.