FTC Seeks Public Comment on Whether to Update Rule on Impersonation of Government and Businesses to Address Platforms’ Role in Promoting Impersonation Scams
The FTC is considering updates to its impersonation rule to address how digital platforms’ ad-optimization tools may facilitate scams, seeking public input on potential new obligations for platforms.
The Federal Trade Commission announced it is evaluating whether to revise its Rule on Impersonation of Government and Businesses to address concerns that ad-optimization tools on digital platforms may inadvertently promote impersonation scams. The agency is specifically examining how social media, search engines, and other online platforms use these tools to optimize ads, which scammers exploit to impersonate legitimate entities. The FTC’s inquiry focuses on whether platforms should be required to take additional steps to prevent such ads from reaching consumers.
In a statement, Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, emphasized the broader impact of impersonation scams on market trust and consumer protection. He noted that these scams, often powered by the same advertising tools used by legitimate businesses, undermine the foundations of competitive markets. The FTC highlighted that consumers reported nearly $3.5 billion in losses to impersonation fraud in the previous year, with the true financial toll likely higher.
The FTC’s Advance Notice of Proposed Rulemaking (ANPRM) seeks public comment on the role of ad-optimization tools in amplifying impersonation scams across digital platforms. The notice asks whether platforms should be obligated to implement measures to block or reduce the dissemination of fraudulent ads. The ANPRM also explores how these tools, while designed to benefit legitimate advertisers, can be misused by scammers to target unsuspecting consumers.
The ANPRM invites stakeholders to provide input on a range of topics related to the use of ad-optimization tools and the proliferation of impersonation ads. Comments will be accepted for 60 days after the notice is published in the Federal Register and will be publicly posted. The FTC’s vote to publish the ANPRM was unanimous, reflecting bipartisan concern over the issue.