HR7548-119

What This Bill Does

This bill targets scam advertising on public-facing online platforms, including social media, social networks, virtual reality environments, and services built around user-generated content. Paid ads that are fraudulent or deceptive become unlawful when the platform accepted payment and failed to take reasonable preventive steps. Platforms must verify advertiser legal identity and physical location, collect sufficient contact information, prevent false or stolen identities, maintain impersonation detection and mitigation, run automated and manual fraud-detection systems, provide a user reporting tool, investigate reports within 72 hours, notify reporters within 24 hours after investigations, and remove violating ads within 24 hours after a violation determination. FTC-approved detection programs can create a compliance presumption, but the FTC can still enforce individual cases. Violations are treated as FTC unfair or deceptive acts; state attorneys general can sue for injunctions, compliance, damages, restitution, and other relief; injured people can sue for injunctions, actual damages, restitution, penalties, attorney fees, and up to treble damages for willful or knowing violations. Section 230(c)(1) does not apply to violations, while Section 230(c)(2) remains unaffected. FTC must issue rules within one year, review them annually, and report within nine months on additional online scam and payment-fraud authority.

Who Benefits and How

Consumers harmed by scam ads, older adults targeted by fraud, legitimate businesses impersonated online, state attorneys general, and the FTC benefit from verification duties, reporting tools, takedown timelines, enforcement authority, and private remedies.

Who Bears the Burden and How

Online platforms, paid advertisers, social media services, virtual reality platforms, and platform compliance teams must build advertiser-verification, fraud-detection, reporting, investigation, notification, removal, and recordkeeping processes. The FTC must write rules, review them annually, enforce violations, and report on regulatory gaps.

Key Provisions

• Requires online platforms that accept paid ads to verify advertiser identity, location, legal existence, and contact information.
• Requires impersonation detection, automated and manual fraud-detection systems, user reporting tools, 72-hour investigations, and 24-hour removal after violation findings.
• Creates FTC enforcement, state attorney general enforcement, and private civil actions with attorney fees and possible treble damages.
• Blocks Section 230(c)(1) immunity for violations while preserving Section 230(c)(2) protections and state or local law.
• Directs FTC rulemaking within one year and a nine-month report on online scams involving financial transactions.