Noting that impersonation scams have topped the list of consumer fraud complaints reported to the FTC in recent years, the commission is considering whether to update its Rule on Impersonation of Government and Businesses or take other action to prevent ad-optimization practices by online platforms that may be furthering impersonation scams.
In an Advance Notice of Proposed Rulemaking (ANPRM) the FTC is soliciting comment on the extent to which ad-optimization services offered by digital marketplace platforms assist efforts by scammers using online ads to impersonate legitimate businesses and government agencies.
Comments are due on or before Nov. 30.
In the preamble to the ANPRM, the FTC summarizes the issue as follows:
“As with other ads, Platforms can generate revenue from scam ads in multiple ways, including when Platform services are used to develop the ads, when the ads are posted on the Platform, or when consumers engage with the ads. However, Platforms do not bear meaningful responsibility for the enormous social cost that results when consumers are victimized by scam ads that Platforms display and optimize. These costs may represent negative externalities—costs that are not borne by the parties best positioned to reduce them—in this case, the Platforms. The result is Platforms seeking to maximize their ad-related revenues with insufficient financial disincentive to avoid generating those revenues from scam ads. In other words, Platforms internalize the revenue but externalize the risk.” (Footnotes omitted.)
The FTC also states that it adopted the existing Rule to address the prevalence of impersonation scams across the economy, but the Rule does not expressly address Platform conduct that furthers impersonation scams. The FTC addresses the protections provided to digital platforms under section 230 of the Communications Decency Act regarding third-party content, and concludes that the section does not preclude the FTC from engaging in the rulemaking.
Addressing the goals of the rulemaking, the FTC states:
“By defining, with specificity, the Platform conduct that is unfair or deceptive, the rule would give Platforms the guidance they need to refrain from problematic practices that further impersonation scams, while also allowing the Commission to pursue enforcement actions against Platforms based on the defined conduct itself, without the need to demonstrate that the defined conduct is unfair or deceptive. The result is a framework that both prevents and mitigates a universe of impersonation scams by addressing the underlying Platform practices that drive them.”
The ANPRM “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,” Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection said.
Mufarrige continued, “[f]ree markets depend on trust, transparency and consumers’ ability to make informed choices.”. Impersonation scams—especially when amplified by digital platforms that profit from them—do more than rob Americans of their hard-earned money. They erode the very foundation that allows competitive markets to function. Today’s impersonation scams are no longer the work of isolated con artists; they are sophisticated, highly engineered operations powered by the same advertising and targeting tools that platforms sell to legitimate businesses.”
The FTC advised that in 2025, it received more than one million reports about imposter scams from consumers who reported losing almost $3.5 billion to those scams. The FTC also advised that in 2025, nearly 30% of the consumers who said they lost money to scammers said they were first contacted on social media platforms and those consumers reported losing $2.1 billion.
The ANPRM seeks comments on a wide range of topics related to the use of ad-optimization tools and services and the proliferation of ads that impersonate businesses and government agencies including the:
- Financial incentives being used by platforms to offer ad-optimization tools and services, details on how the tools optimize the content and delivery of an ad.
- Steps platforms take to prevent use of such tools and services for deceptive advertising.
- Extent to which these tools and services constitute unfair or deceptive acts or practices.
- Prevalence of these acts or practices in the marketplace.
The FTC also is seeking comments on whether it should amend the existing impersonation rule, propose a new rule or use non-regulatory measures. The ANPRM also asks what measures the commission could consider in crafting new regulations including removing confirmed impersonation scam ads and pursuing disciplinary action against the offending advertisers.
The FTC presents numerous questions to obtain information from the public, including the following questions regarding the role of digital platforms in advertising optimization:
What measures does each Platform identified in response to a prior question employ to prevent the use of their advertising-optimization tools/services for deceptive advertising involving government or business impersonation (‘‘Impersonation Ads’’)?
a. Does the Platform verify the advertiser’s identity prior to providing access to its tools/services? If so, how? What criteria, factors, and/or metrics does the Platform use to perform the verification?
b. Does the Platform perform any steps other than verifying the advertiser’s identity to determine whether to provide access to its tools/ services? If so, what and how? For instance, does the Platform evaluate the advertiser’s website for signs that the advertiser is engaged in Impersonation Ads? What criteria, factors, and/or metrics does the Platform use to determine whether to provide access to its tools/services?
c. Does the Platform restrict the use of trademarks, tradenames, or other names or symbols identifying government or business entities unaffiliated with the advertiser, when optimizing the content or delivery of advertisements? If so, how? What criteria, factors, and/or metrics does the Platform use to determine whether to restrict the use of particular trademarks, tradenames, or other identifying names or symbols?
d. Does the Platform screen or monitor advertisements to determine whether they are Impersonation Ads? If so, how? What criteria, factors, and/or metrics does the Platform use to determine whether an advertisement is an Impersonation Ad?
e. Does the Platform take any steps to remediate Impersonation Ads that have already been posted and/or optimized? If so, what steps? What criteria, factors, and/or metrics does the Platform use to determine which steps to take to remediate the posted and/or optimized Impersonation Ad?
f. Does the Platform take any steps to discipline advertisers who have engaged in Impersonation Ads? If so, what steps? What criteria, factors, and/or metrics does the Platform use to determine whether to discipline the advertiser and which disciplinary steps to take? g. Does revenue or any other benefit that the Platform derives from posting, or from providing tools/services for optimizing, Impersonation Ads play a role in the Platform’s setting or use of the criteria, factors, and/or metrics referenced in response to Questions a through f above? If so, how?