FTC Seeks Comment on Proposed Rule to Crack Down on Platform Facilitation of Impersonation Scam Ads

The Federal Trade Commission (FTC) is considering whether to impose new requirements on social-media companies, search engines and other online platforms whose advertising systems help impersonation scams reach consumers.

In a September 24 Advance Notice of Proposed Rulemaking (ANPRM), the FTC requested information about platforms’ ad-optimization tools, financial incentives and efforts to prevent fraudulent advertisers from impersonating government agencies and legitimate businesses.

The Commission is for now seeking comments “on whether it should commence a rulemaking proceeding to amend the Rule, or to adopt some other measure, to address unfair or deceptive practices by Platforms that further government and business impersonation scams through their ad-optimization tools and services.”

The ANPRM details the pervasiveness of such practices, which the FTC says increasingly depend on the same automated advertising tools that legitimate companies use to generate content, identify receptive audiences and optimize campaigns.

“Free markets depend on trust, transparency and consumers’ ability to make informed choices,” Bureau of Consumer Protection Director Christopher Mufarrige said in an FTC press release. Impersonation schemes, he added, “erode the very foundation that allows competitive markets to function.”

According to the ANPRM, the FTC received more than 1 million imposter-scam reports in 2025, with consumers reporting nearly $3.5 billion in losses. Nearly 30% of consumers who reported losing money to scams said they were initially contacted through social media, accounting for $2.1 billion in reported losses. Across all forms of fraud, consumers reported approximately $16 billion in losses during 2025, a 25% increase from the previous year.

The FTC’s current Rule on Impersonation of Government and Businesses, adopted in 2024, prohibits parties from falsely posing as government entities, businesses or their officers and agents, or misrepresenting an affiliation with them. The rule does not expressly address platforms whose tools may facilitate or enhance an impersonation scheme.

The Commission previously considered a broader “means and instrumentalities” provision that would have covered entities providing goods or services while knowing, or having reason to know, that they would be used for impersonation. It declined to adopt that provision after commenters argued that it was overbroad and had not been introduced through the proper rulemaking stage.

The ANPRM defines covered platforms broadly as public-facing websites or applications on which third parties advertise or list goods, services or opportunities. It identifies Google, Facebook, Amazon, Apple’s App Store and LinkedIn as examples.

According to the FTC, platforms can help create advertising copy, images, videos and product listings, while using consumers’ demographics, browsing histories, search terms and other information to determine who receives an advertisement. Those tools can benefit legitimate commerce but can also make fraudulent ads more persuasive and help scammers target likely victims.

Platforms may earn money when an advertisement is created, posted or clicked, including when the advertiser is fraudulent, while consumers, impersonated businesses and government agencies bear the resulting costs. As the ANPRM explains, platforms may “internalize the revenue but externalize the risk.”

The FTC is seeking evidence from commenters about whether particular platform practices qualify as unfair or deceptive acts or practices and whether they are sufficiently prevalent to justify a rule. It asks how advertising systems contribute to scams, whether platforms encourage or fail to prevent misuse of their tools, and how nonadvertising content—such as sham social-media profiles—may bolster schemes conducted by telephone or text message.

Potential requirements outlined in the notice include verifying advertisers’ identities, reviewing ads before publication, monitoring for impersonation, providing prominent consumer-reporting tools, investigating complaints, removing confirmed scam ads and terminating optimization services for offending advertisers. Platforms could also be required to discipline repeat offenders and maintain compliance records. Compliance with the safeguards could provide a safe harbor from liability.

The Commission is also requesting comment on the appropriate knowledge or participation standard for platform liability, possible burdens on small businesses, costs to legitimate advertisers and whether regulation could discourage innovation in AI-powered advertising tools.

Addressing potential objections under Section 230 of the Communications Decency Act, the FTC argued that the statute does not prevent it from regulating a platform’s own conduct. While Section 230 says that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” this language merely “provides Platforms an affirmative defense for liability that arises from merely hosting third-party content,” said the ANPRM. “Beyond that, however, courts have held that section 230 immunity does not extend to all Platform conduct that involves third-party content,” it added.

The Commission approved issuance of the notice by a 2-0 vote. Comments will be due 60 days after the notice appears in the Federal Register and may be submitted through Regulations.gov.

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