FTC wants to crack down on AI impersonation of individuals

Amid surging complaints about AI-driven impersonation fraud, the Federal Trade Commission (FTC) is exploring the expansion of a new rule that offers protections for government and businesses that fall victim to such scams.

The FTC on Thursday finalized a rule giving it stronger tools to go after con artists impersonating businesses and government agencies, often via AI, by allowing the agency to directly file federal court cases to claw back proceeds made from the scams.

In announcing the new rule, the agency said that after receiving feedback from the public it is now considering extending the new protections to individuals who are victims of AI-driven and other types of impersonation fraud.

The new rule comes a week after the Federal Communications Commission announced it would outlaw AI-generated voice cloning in robocalls.

New technologies, including AI-generated deepfakes, are fueling an increase in impersonation fraud, spurring the FTC to broaden its enforcement capabilities, the agency said in a press release.

The agency is now specifically exploring whether the new rule should make it illegal for businesses, and particularly AI businesses, to create “images, video, or text, to provide goods or services that they know or have reason to know is being used to harm consumers through impersonation,” the agency said.

“Fraudsters are using AI tools to impersonate individuals with eerie precision and at a much wider scale,” FTC Chair Lina Khan said in a statement. “With voice cloning and other AI-driven scams on the rise, protecting Americans from impersonator fraud is more critical than ever.”

The new rule allows the FTC to go to court to quickly recover funds when fraudsters:

• Deploy government seals or fake business logos when interacting with consumers by mail or online
• Spoof government and business emails and web addresses
• Use deception to imply government or business affiliation

The agency said the new rule’s allowance for the FTC to go to court is especially significant because of an April 2021 Supreme Court ruling that constrained the agency from requiring defendants to repay consumers they had conned.

Both government and business impersonation fraud reports increased in 2023, the FTC said.

The new rule will be effective 30 days after it is published in the federal register the agency said, adding that it expected it to be published soon.