The exchange for the debt economy
Markets can’t function without trust. As a consumer, you must be able to trust that the person or business you’re talking to is who they claim to be, and that the information they’re giving you is truthful. The effects of the collapse of that social trust ripples far beyond any single scam. Social distrust erodes the confidence that consumers, businesses, and institutions need to transact, invest, and participate in our economy. The Federal Trade Commission has long recognized that protecting consumers from deception preserves the integrity of the marketplace itself.
Americans are under siege. Every year, fraudsters and scam artists steal tens of billions of dollars from Americans. Last year, Americans reported $16 billion in losses to fraud, an increase from $12 billion the year before. Since many Americans don’t report financial losses from fraud, the FTC estimated that the true cost of fraud in 2024 might have been as high as $195.9 billion. Fighting fraud has long been the cornerstone of the FTC’s consumer protection mission. As civil law enforcers, we go to court to shut down scams, and where the law permits, redress victims.
The top fraud reported by consumers last year was impersonation fraud, where an imposter pretends to be a real business, government agency, romantic interest, or family member to steal money from the victim who believes that the fraudster’s request (or demand) for money is legitimate. In 2025, consumers reported nearly $3.5 billion in losses due to impersonation fraud — and real losses are likely an order of magnitude higher.
Our primary means of fighting impersonation fraud is targeting the imposters themselves, as showcased by our recent actions against alleged impersonators of government agencies and large insurance companies. This past June, for example, we secured nearly $10 million in consumer redress from scammers that allegedly impersonated the IRS to sell their purported tax-relief services.
But foreign criminals often use America’s digital communications and payment systems to perpetrate these scams, especially on social media platforms, digital marketplaces, and search engines. Since 2020, the amount of money lost to social media scams has increased eightfold, affecting almost every age group of Americans, and the total financial losses attributed to social media scams are much higher than any other contact method.
These facts shouldn’t surprise us. The social media companies’ main revenue stream is the sale of advertising space on their platforms. They convince advertisers to use their platforms by promising hyper-efficient targeting of individuals likely to engage with a particular ad. Ideally, this would be a win-win for advertisers and users on the platform. Users would see only advertisements that appealed to them, enhancing their user experience as well as engagement on the platform. But these sophisticated targeting algorithms benefit legitimate businesses and scammers alike.
In the old days, con men invested time in identifying and manipulating a “mark.” Today’s con men use platforms whose sophisticated algorithms target and manipulate the mark for them. We would expect firms to protect their customers from such harm since their business model depends on user engagement and trust with the platform. But that isn’t what we see today.
When consumers fall victim to impersonation scams, they typically look to the impersonated entity (e.g., a business or government agency) for recourse, rather than the platform that delivered the advertisement. As a result, the technology platforms that promoted, amplified, and optimized the fraudulent ads reap substantial advertising profits but bear virtually none of the financial consequences. The platforms pocket the profits, American consumers bear the costs.
Although technology platforms have the tools to stem the tide, including the ability to vet their advertisers and police their ads, the amount lost to fraud continues to rise. They aren’t doing nearly enough to confront the problem. And because consumers tend to blame the impersonated firm or their bank rather than the platform for the fraud, the platforms have little incentive — financial or otherwise — to change course.
That’s why the FTC has begun the process of crafting a new rule that would make social media platforms, digital marketplaces, and search engines accountable for enabling and amplifying impersonation fraud. As part of this process, the FTC is seeking public comments on the types of requirements that the rule should contain to ensure that companies are incentivized to prevent fraudulent activity on their platforms, rather than profiting from it.
Markets function well only when participants can rely on truthful information. This is where government, and specifically the commission, plays a critical role. By targeting fraud and deception that distorts or supplants the market process, the commission safeguards the conditions under which competitive markets can flourish, promoting the common good of all Americans.
We can no longer tolerate the status quo. Government exists to protect the common good of its citizens, particularly when a market failure rewards companies for harming, rather than serving, their customers.
If Big Tech won’t put American citizens first by cracking down on scammers who use their platforms to prey on the innocent, the FTC will do it for them.
This article does not necessarily reflect the opinion of Bloomberg Industry Group Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.
Author Information
Andrew N. Ferguson is chairman of the Federal Trade Commission. He previously was Virginia’s solicitor general, chief counsel to Sen. Mitch McConnell of Kentucky, and a clerk for the US Court of Appeals for the DC Circuit and Supreme Court Justice Clarence Thomas.
Christopher Mufarrige is director of the FTC Bureau of Consumer Protection. Previously he was chief of staff to FTC Commissioner Melissa Holyoak, an attorney at private law firms, and an in-house lawyer.
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