Competition & Regulation

Consumer Advocates Support Proposed Rule to Establish Legal Liability for AI Fraud

Regulation Would Combat Impersonation Fraud of Individuals and Artificial Intelligence (“AI”) Enabled Scams

The Consumer Federation of America, National Consumers League, and five other organizations submitted comments in support of a Federal Trade Commission proposal that would establish legal liability for artificial intelligence (AI) developers who know (or have reason to know) that their AI is facilitating fraud.

The FTC’s proposed rule would enable the agency to crack down on scams that use deepfakes and voice cloning. It would also help to fill a glaring gap in its ability to hold impersonation frauds accountable, like romance and grandparent scams. The organizations also urged the Commission to clarify that the liability for AI developers in facilitating fraud should also apply to companies that provide scammers access to AI tools, even if the companies did not develop the AI themselves.