Fraud, Platforms, and the Art of Getting Ahead of Yourself
The Federal Trade Commission (FTC) wants to stop impersonation scams. Fair enough. But calling a new regulatory venture an “update” doesn’t make it one, and spotting a real problem doesn’t tell you which rules—if any—will solve it. A little more homework would help.
On Sept. 24, the FTC announced an advance notice of proposed rulemaking (ANPRM)—an early step toward a possible rule change—which appeared in the Federal Register on Oct. 1. The announcement asked whether to “update its Rule on Impersonation of Government and Businesses or take other action to prevent online platforms from engaging in ad-optimization practices that may be furthering impersonation scams.”
That’s a potentially substantial shift—from policing fraudsters to holding platforms responsible for the scams they fail to prevent.
Spoiler alert: This should have been a request for information (RFI).
Yes, impersonation fraud is a thing, and no small problem. Yes, it’s within the FTC’s purview. And yes, Section 18 of the FTC Act grants the commission authority to issue rules addressing “unfair or deceptive acts or practices in or affecting commerce,” which Section 5 of the act prohibits.
Still, the ANPRM seems to me, at best, premature and ill-conceived. Before setting new obligations for platforms, the FTC should better understand the problem, the tradeoffs, and its own capacity to enforce the solution.