The Federal Trade Commission is exploring possible rulemaking to prevent online platforms from using ad-optimization practices that exacerbate impersonation scams, according to an announcement.
The FTC is considering whether to update its existing rule on government and business impersonation to address the problem, “or take other action to prevent online platforms from engaging in ad-optimization practices that may be furthering impersonation scams,” the commission said.
As part of that process, the FTC will seek 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.
“Increasingly, consumers rely on a small number of dominant digital platforms for everyday transactions — from shopping, banking and travel bookings to accessing government services,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “Yet these platforms are the very places fraudsters seek out consumers, exploiting their trust while platforms profit from optimizing and disseminating scam ads.”
The American Bankers Association has long called attention to the problem and urged lawmakers to pass the SCAM Act, which would require social media companies to verify advertisers’ identity, implement systems to detect fraudulent advertisements, and investigate and remove fake ads. In a statement, ABA President and CEO Rob Nichols welcomed the FTC announcement.
“Fraudsters increasingly exploit digital advertising, social media and other online services to impersonate trusted organizations, including banks, to deceive consumers,” Nichols said. “ABA has long advocated for a whole-of-ecosystem approach to combating fraud and supports efforts to address the tools, technologies and platforms that scammers use to reach potential victims. We look forward to working with the FTC as it considers additional steps to protect consumers from fraud.”
