UNITED STATES OF AMERICA

Federal Trade Commission

WASHINGTON, D.C. 20580

Office of the Chair

Remarks of Chair Lina M. Khan 

As Prepared for Delivery

Financial Literacy and Education Commission Public Meeting

November 17, 2022 

Hello, everyone—thanks so much for having me. I’m thrilled to be joining this important 

conversation. 

As we all know, get-rich-quick schemes are as old as commerce itself. But the digital 

economy has created new tactics and vehicles for fraudsters to exploit. At the FTC we’ve been 

squarely focused on identifying the worst offenders and the areas where unlawful business 

practices that harm the financial well-being of Americans persist. 

I want to touch on three areas in particular where we have seen some of these pernicious 

practices—and share the steps that the FTC is taking to ensure we are undertaking effective and 

efficient enforcement that promotes deterrence, rather than playing whack-a-mole. 

The first area is imposter scams. Government and business impersonation schemes cheat 

American consumers and small businesses out of billions of dollars every year. These scammers 

often pretend to be working for government institutions—like the Social Security Administration 

or the IRS— and tell targets that if they don’t hand over money or submit sensitive personal 

information, they could lose a government benefit, face a tax liability—or even be arrested. Both 

our enforcement work and consumer data suggest that government and business impersonation 

scams appear highly prevalent and increasingly harmful. These scams have been the top category 

of fraud reports and the largest source of total reported consumer financial losses for several 

years. To address this persistent fraud, the FTC recently proposed a trade regulation rule to 

combat government and business impersonation schemes.0F

1

 If finalized, this rule could have a 

market-wide impact and serve as a deterrent for bad actors, given that a rule here would subject 

first-time violators to civil penalties. It could also enable the Commission to obtain redress for 

the people who lose money to these impersonation scams.

A second area where we continue to see pernicious activity is false earnings claims. False 

earnings claims routinely mislead Americans into investing thousands of dollars into 

opportunities that turn out to be a sham. Be it misleading claims about multilevel marketing 

schemes that lure in aspiring entrepreneurs, false marketing from for-profit schools targeted at 

hopeful students, or deceptive representations from “gig” platforms that draw workers, the cost 

1 Press Release, Fed. Trade Comm’n, FTC Proposes New Rule to Combat Government and Business Impersonation 

Scams (Sept. 15, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/09/ftc-proposes-new-rulecombat-government-business-impersonation-scams. 
2 

of these false claims can be devastating. These claims lose people money and time and saddle 

them with debt. The economic precarity spurred for many by the pandemic further created an 

environment ripe for these tactics, where fraudsters can use false claims to prey on Americans 

seeking additional income or a new job. These tactics can also harm law-abiding businesses, who 

may lose out to rivals that are winning customers through deceptive claims. To address this 

practice and better promote deterrence, earlier this year the FTC initiated a rulemaking to

challenge false earnings claims.1F

2 Here too, a final rule could enable us to impose civil penalties 

on violators and return money to injured consumers, workers, and entrepreneurs. 

A third area where we have seen persistent harmful activity is fake online reviews. 

Online reviews are essential, but it’s hard to know when they can be trusted. Precisely because of 

the importance of reviews, firms can face powerful incentives to game the system. Businesses 

have been caught leaving positive reviews for their own products or services, suppressing 

negative ones, and boosting bad reviews of their competitors. The incentives extend beyond the 

seller of the product itself. The platforms that host reviews may also, in some instances, benefit 

indirectly from fake ratings and endorsements and have financial incentives to turn a blind eye to 

misconduct that brings in revenue. These practices don’t only harm the consumers who place 

their trust in fake reviews. They also pollute the marketplace and put honest businesses at a 

competitive disadvantage. A rulemaking we initiated earlier this year could combat deceptive or 

unfair review and endorsement practices, such as using fake reviews, suppressing negative 

reviews, and paying for positive reviews.2F

3 A rule that triggers stiff civil penalties for violators 

would make the market fairer for consumers and honest businesses alike.

While the Commission has had a long record of enforcement and education in each of 

these areas, the continuing persistence of these practices suggests that the type of market-wide 

rules we are considering may be necessary to fully combat lawbreaking and protect Americans. 

Lastly, I’ll note that we continue to monitor cryptocurrency scams. As some speakers

have pointed out today, the digital asset marketplace has core features that make it easy for 

scammers to target consumers. It runs on complex code that most ordinary people can’t 

scrutinize. And there’s often no central authority to flag or reverse shady transactions. The 

schemes deployed by scammers are not new, but the lack of guardrails in this new marketplace 

has given scammers a new way to take advantage of consumers. 

FTC data show that since the start of 2021, more than 46,000 Americans collectively

reported losing over 1 billion dollars in crypto to scams—most of it to investment-related fraud

promising big returns in a hurry.3F

4 These losses in 2021 were nearly sixty times what they were in 

2018. Scammers use social media as a vehicle to target consumers. Nearly half of those who

2 Press Release, Fed. Trade Comm’n, FTC Takes Action to Combat Bogus Money-Making Claims Used to Lure 

People Into Dead-End Debt Traps (Feb. 17, 2022), https://www.ftc.gov/news-events/news/pressreleases/2022/02/ftc-takes-action-combat-bogus-money-making-claims-used-lure-people-dead-end-debt-traps. 3 Press Release, Fed. Trade Comm’n, FTC to Explore Rulemaking to Combat Fake Reviews and Other Deceptive 

Endorsements (Oct. 20, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/10/ftc-explorerulemaking-combat-fake-reviews-other-deceptive-endorsements. 4 Emma Fletcher, Reports Show Scammers Cashing in on Crypto Craze, FTC CONSUMER PROTECTION DATA 

SPOTLIGHT (June 3, 2022), https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2022/06/reportsshow-scammers-cashing-crypto-craze. 
3 

reported crypto losses said their problems started with seeing an ad, post, or message on a social 

media platform—suggesting that dominant platforms in particular can serve as a key vehicle for 

these scams to proliferate. 

We are bringing our full set of enforcement tools to bear on these types of fraudulent 

schemes. We have brought actions resulting in refunds amounting to hundreds of thousands of 

dollars to consumers who lost money to allegedly deceptive chain referral schemes involving 

cryptocurrencies.4F

5

 And we recently went to court to enforce a civil investigative demand against 

a cryptocurrency exchange that reportedly lost more than 200 million dollars’ worth of 

consumers’ crypto assets.5F

6

Just yesterday we announced an action against DK Automation and its owners, for 

allegedly using unfounded claims of big returns to entice consumers into moneymaking schemes 

involving business coaching and cryptocurrency.6F

7

 As noted in our complaint, the defendants 

promised consumers that they could “generate passive income on autopilot” when the truth was 

that few consumers ever made money from these schemes.7F

8

 A proposed order would require the 

defendants to turn over $2.6 million to be used to refund consumers harmed by their alleged 

deception. 

As we work to stand up guardrails, we can also equip consumers with information that 

makes it easier to spot common crypto scams. The FTC’s Division of Consumer and Business 

Education regularly releases publications and does outreach to directly warn communities about 

the various types of crypto fraud.8F

9 We also recently held a briefing with local and ethnic media 

outlets to help sound the alarm on crypto scammers. Working with federal and state regulators—

including our friends in the FLEC—has also allowed us to disseminate FTC resources more 

broadly in both English and Spanish. 

Across all of this work, our efforts prioritize redressing consumer harm and preventing 

future misconduct. Protecting Americans from unexpected losses and holding bad actors 

accountable are what drive the FTC’s efforts in this space. I look forward to working with 

partners here and across the country to continue this important work. Thank you. 

*** 

5 Press Release, Fed. Trade Comm’n, FTC Sends Refunds to Victims of Deceptive Money-Making Schemes 

Involving Cryptocurrencies (Nov. 4, 2020), https://www.ftc.gov/news-events/news/press-releases/2020/11/ftcsends-refunds-victims-deceptive-money-making-schemes-involving-cryptocurrencies. 6 See Petition for an Order to Show Cause and for Summary Enforcement of Civil Investigative Demands, FTC v. 

Bachi.Tech Corp., No. 2:22-cv-06463 (D.N.J. filed Nov. 4, 2022). 7 Press Release, Fed. Trade Comm’n, FTC Takes Action to Stop DK Automation and Kevin David Hulse From 

Pitching Phony Amazon and Crypto Moneymaking Schemes (Nov. 16, 2022), https://www.ftc.gov/newsevents/news/press-releases/2022/11/ftc-takes-action-stop-dk-automation-kevin-david-hulse-pitching-phony-amazoncrypto-moneymaking. 8 Complaint for Permanent Injunction, Monetary Relief, Civil Penalties, and Other Relief, FTC v. DK Automation, 

LLC, No. 1:22-cv-23760 (S.D. Fla. Nov. 16, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/DK-AutomationComplaint.pdf. 9 See, e.g., Fletcher, supra note 4; Fed. Trade Comm’n, What To Know About Cryptocurrency and Scams (May 

2022), https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams.