WASHINGTON, D.C. — The Federal Trade Commission (FTC) has issued warning letters to operators of websites offering Employer Identification Number (EIN) filing and delivery services, cautioning them against practices that may violate the FTC Act and the Impersonation Rule. These rules prohibit entities from posing as or misrepresenting affiliation with government agencies, such as the Internal Revenue Service (IRS).
These services reportedly charge consumers up to $300 to obtain EINs, even though the IRS provides them free of charge through its website. “Impersonating the government is unlawful, period,” said Chris Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The FTC is warning businesses that sell services the government provides to review their websites and advertisements for symbols and words that mislead consumers.”
FTC’s Concerns
The FTC letter highlights practices used by some EIN filing services to falsely imply an association with the IRS. These tactics allegedly include the use of seals, logos, and website designs that mimic the IRS, as well as including the acronym “IRS” in domain names or prominently displaying terms like “EIN Assistant.” Consumers have further complained that these sites often fail to disclose that the hundreds of dollars charged are service fees rather than mandatory costs.
Potential Penalties
Entities found in violation of the FTC Act or the Impersonation Rule may face civil penalties of up to $53,088 per violation. Additionally, they could be required to refund defrauded consumers. The FTC has advised companies to thoroughly review their marketing practices, including advertisements, promotional materials, and website content, to ensure compliance with the law.
The Commission emphasized that while the letters do not confirm recipients have violated any laws, recipients should take proactive steps to address any potential misleading practices.
Broader Context
The FTC’s latest warnings build on a broader campaign against deceptive practices in consumer services. Notable recent enforcement actions include cases against companies such as Superior Servicing LLC, Panda Benefit Services, LLC, and DOTAuthority.com, Inc., among others. These actions reflect the FTC’s commitment to protecting consumers from misleading practices and promoting transparency in the marketplace.
Consumers seeking EINs are reminded that these identifiers, which are required for various purposes such as opening businesses or managing estates, are available for free directly from the IRS. The FTC’s continued scrutiny aims to ensure that consumers are not exploited by services misrepresenting themselves as government-affiliated.
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