The rise of artificial intelligence (AI) sophisticated enough to impersonate individuals has led to a surge in complaints about fraud and other consumer harm. In response, the Federal Trade Commission (FTC) issued a supplemental notice of proposed rulemaking (NPRM) to strengthen anti-fraud measures included in its recently finalized Government and Business Impersonation Rule.

AI-generated “deepfakes,” and other emerging technology, have the potential to “turbocharge” the types of impersonation fraud the agency has seen become more pervasive and has cost consumers and entities billions of dollars in recent years as AI capabilities continue to improve and become more widely available, the FTC said in the release.

“Fraudsters are using AI tools to impersonate individuals with eerie precision and at a much wider scale. With voice cloning and other AI-driven scams on the rise, protecting Americans from impersonator fraud is more critical than ever,” FTC Chair Lina Khan said in a press release. “Our proposed expansions to the final impersonation rule would do just that, strengthening the FTC’s toolkit to address AI-enabled scams impersonating individuals.”

Khan was joined by FTC Commissioners Rebecca Kelly Slaughter and Commissioner Alvaro Bedoya in releasing a separate statement on the matter.

“Impersonation schemes cheat Americans out of billions of dollars every year,” the commissioners said. “Fraudsters pretending to represent government agencies — like the Social Security Administration or the IRS — tell targets that if they do not hand over money or their sensitive personal information, then they could lose a government benefit, face a tax liability, or even be arrested. Scammers also commonly claim false affiliations with household brand names to bilk consumers for bogus services.”

Impersonation scams resulted in $2 billion in stolen funds between October 2020 and September 2021, an 85 percent increase year-over-year, the commissioners noted. In 2023, consumers reported $2.7 billion in losses from imposter scams.

The FTC is asking for feedback on whether the revised rule should declare it unlawful for a company – such as an AI platform that creates images, video, or text – to provide goods or services that they know or have reason to believe are being used to harm consumers through impersonation.

Comments the FTC received regarding its Government and Business Impersonation Rule raised concerns about additional threats and harms posed by bad actors who impersonate individuals, which the agency decided are not adequately addressed by the final rule’s existing provisions. The proposal is intended to help the agency deter fraud and secure redress for harmed consumers.

The rule was crafted to enable the agency to directly file federal court cases against scammers who impersonate businesses or government agencies, forcing them to return funds made from such scams. This is particularly important given the Supreme Court’s April 2021 ruling in AMG Capital Management LLC v. FTC, which significantly limited the agency’s ability to require defendants to return money to injured consumers, the FTC explained.

Specifically, the rule would allow the FTC to directly seek monetary relief from scammers that:

• Use government seals and business logos when interacting with consumers by mail or online.
• Spoof government and business emails and web addresses, including “.gov” email addresses, or use lookalike email addresses or websites that rely on misspellings of a company’s name.
• Falsely imply affiliation with a government or business entity by using terms commonly associated with a government agency or business (e.g., stating “I’m calling from the clerk’s office” to falsely imply affiliation with a court of law).