FTC Says It's Considering Revising the FTC's Impersonation Rule

The Federal Trade Commission announced today that it is considering whether to revise the FTC's Trade Regulation Rule on Impersonation of Government and Businesses or to take other action “to prevent online platforms from engaging in ad-optimization practices that may be furthering impersonation scams.” 

In an Advance Notice of Proposed Rulemaking, which should be published soon in the Federal Register, the FTC is seeking comment on the extent to which ad-optimization tools and services offered by social media, search engines, and other digital marketplace platforms further efforts by scammers to impersonate legitimate businesses and government agencies using online ads.

In announcing the action, Christopher Mufarrige, the Director of the FTC’s Bureau of Consumer Protection, said, “Today’s advance notice of proposed rulemaking asks whether the Commission should require platforms to take concrete steps to prevent impersonation ads from ever reaching consumers. By exploring potential new obligations platforms would have to follow, the rulemaking aims to ensure that Americans participate in an online economy where truthful information guides consumer choice.”

In the ANPR, the FTC says that Americans lose billions of dollars every year to scams  and that the top type of fraud reported to the FTC is impersonation scams – “where an imposter pretends to be a real business, government agency, family member, or other trusted source to elicit money from the victim.” 

The FTC acknowledges in the ANPR that, due to Section 230 of the Communications Decency Act, online platforms are ordinarily not responsible for third party content that is posted on their platforms.  The FTC asserts, however, that, “To the extent Platform conduct falls outside section 230 and is unfair or deceptive, the Commission may exercise its authority to protect consumers from such conduct.”  

Noting that the Commission “may consider a range of measures in proposing any new or amended regulations,” the ANPR asks wide-ranging questions, soliciting detailed information from the industry.  Public comments are due 60 days after the ANRP is published in the Federal Register.