By Andrew Miller
The Federal Trade Commission is considering a crackdown on online ad platforms used by scammers that impersonate legitimate businesses and government agencies.
Last year, Americans reported losing nearly $3.5 billion to impersonation scams.
The fake ads are so effective because they use the same advertising and targeting tools that platforms like Google and Meta sell to real businesses.
The tools allow the scammers to put convincing ads in front of the people most likely to click on them.
For example, Meta made $14.3 million from fake Medicare ads on Facebook. The ads appeared over 215 million times in one year, driven by an algorithm that intentionally targeted users 65 or older.
In another case, in July California sued the company behind GuestReservations.com and BookingOnline.com, alleging it bought Google ads that ranked above real hotels. The companies then funneled travelers to lookalike portals with marked-up rates, upfront payment, and rigid cancellation policies.
Consumers are the ones who lose money. But the businesses being impersonated lose revenue and reputation too, while many victims blame them instead of the platform.
In the FTC’s words, platforms “internalize the revenue but externalize the risk.” The platforms profit from fake ads either way: when the ad is built, when it runs, and when someone clicks.
That’s the imbalance the FTC wants to address.
On September 24, the commission voted 2-0 to publish an advance notice of proposed rulemaking. In other words, it’s the earliest step toward a rule.
The notice asks whether platforms should verify advertisers before offering those tools, screen ads, investigate complaints, remove confirmed fakes, and cut off the advertisers behind them.
Comments are due 60 days after the notice appears in the Federal Register, which hasn’t happened yet.
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