FTC warns Congress that AI technology like ChatGPT could ‘accelerate’ fraud and scams

At a congressional hearing on Tuesday focused on the Federal Trade Commission’s work to protect American consumers from fraud and other deceptive practices, FTC Chairman Lina Khan and her fellow commissioners warned House representatives about the potential for modern AI technologies, such as ChatGPT, to be used for “turbocharging fraud. The warning was issued in response to a question about how the Commission was working to protect Americans from unfair practices related to technological advances.

Khan responded by accepting that AI presented new risks for the FTC to handle, despite the other advantages it may present.

“AI presents a whole set of opportunities, but it also presents a whole set of risks,” Khan told House representatives. “And I think we’ve already seen ways that it could be used to fuel fraud and scams. We have been warning market participants that instances where AI tools are being designed to effectively deceive people may put them at risk for FTC action,” he stated.

Khan also cautioned that AI’s ability to fuel fraud should be considered a “serious concern.”

To help combat the problem, the FTC chairman noted that his technologists were integrated into the agency’s work, both on the consumer protection side and the competition side, to ensure that any issues with the AI ​​were identified. and drive properly.

In a follow-up, FTC Commissioner Rebecca Slaughter played down Khan’s comments, explaining that the FTC had adapted to new technologies over the years and has the experience to adapt again to combat fraud driven. by the AI.

“There’s a lot of noise around AI right now and it’s important because it’s a revolutionary technology in some ways,” Slaughter said. “But our obligation is to do what we have always done, which is to apply the tools we have to these changing technologies, make sure we have the expertise to do it effectively, but not be scared away by the idea that this is a revolutionary new technology and deepen the protection of people,” he said.

The Commission’s testimony, delivered by Khan, Slaughter and Commissioner Álvaro Bedoya, was presented before the House Energy and Commerce Subcommittee on Innovation, Data and Commerce, and touched on a wide range of issues beyond AI. .

Among those who crossed paths with the technology, agency representatives detailed in their written testimony the FTC’s work to reduce the scourge of unwanted phone calls; your warning to the Opendoor online homebuyer regarding your misleading claims about potential sales prices; misleading claims made by members of the crypto community; your work to protect consumers’ private health data collected by websites and apps; its handling of COPPA (children’s privacy law) violations by the maker of Fortnite, Epic Games; your orders to the Chegg online learning platform for failing to protect personal data; his fight against junk fees and the inability of consumers to easily cancel subscriptions; deceptive practices in the gig economy; and more.

The agency also noted that it launched a new Office of Technology (OT) in February with the goal of supporting the agency’s policy and law enforcement work by offering in-house technical expertise, which could help it keep up with changes. technological. The FTC’s testimony specifically referred to OT’s focus on areas such as security and privacy, digital marketplaces, augmented and virtual reality, the gig economy, and ad tracking technologies, as well as “taking decision making”, or what could include AI.

“The creation of the Office of Technology builds on the FTC’s efforts over the years to expand its internal technology expertise and brings the agency in line with other leading antitrust and consumer protection authorities around the world.” the FTC said.