The FTC released an Advance Notice of Proposed Rulemaking on Tuesday, asking for public comments on whether to revise the Rule on Impersonation of Government and Businesses or take other steps to curb how digital platforms help scammers operate.
The focus is on ad-optimization
The commission is specifically looking at how ad-optimization services offered by online marketplaces assist scammers who use online ads to mimic legitimate businesses and government agencies. According to the FTC, platforms generate revenue from scam ads through various means, including when their services are used to develop the ads, when the ads are posted, or when consumers engage with them. The agency notes that platforms do not bear the full financial responsibility for the social costs when consumers are victimized by these ads, creating a situation where companies maximize ad revenue without sufficient financial disincentive to avoid scam content.
This dynamic creates a classic market failure scenario where the revenue is internalized by the platform but the risk is externalized to consumers and the broader economy. The current rule, adopted to address impersonation scams generally, does not explicitly address platform conduct that further enables these scams, leading the FTC to explore whether the law permits it to define specific platform practices as unfair or deceptive.
“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 FTC stated in the ANPRM preamble.
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Christopher Mufarrige, the Director of the FTC’s Bureau of Consumer Protection, explained that the rulemaking aims to ensure Americans can participate in an online economy where truthful information guides their choices. He noted that free markets rely on trust, transparency, and the ability to make informed decisions, qualities that are eroded when scams are amplified by the same targeting tools platforms sell to legitimate businesses.
2025 data highlights the scale
Officials provided data showing the scope of the issue in 2025. The FTC received more than one million reports about imposter scams that year, with consumers reporting losses of nearly $3.5 billion. The agency also found that nearly 30% of people who said they lost money to scammers were first contacted on social media platforms, with those victims reporting losses totaling $2.1 billion.
The ANPRM solicits detailed information on the financial incentives platforms use to offer ad-optimization tools, how those tools work, and what steps platforms take to prevent deceptive advertising. It asks whether these tools and services constitute unfair or deceptive acts, the prevalence of such practices, and whether the commission should amend the existing rule, propose a new one, or use non-regulatory measures. The agency also asked about potential regulatory approaches, such as removing confirmed scam ads or pursuing disciplinary action against offending advertisers.
Questions for the public
The ANPRM asks the public to provide specific details on the steps platforms take to stop the use of ad-optimization tools for deceptive advertising. It seeks information on whether platforms verify an advertiser’s identity before giving access to these tools. The agency also asks if platforms evaluate an advertiser’s website for signs of impersonation. The FTC wants to know about any criteria platforms use to decide who gets access to optimization services.
