FTC Chair Warns AI Could ‘Turbocharge’ Fraud, Affirms Existing Enforcement Powers

In a congressional hearing, Federal Trade Commission Chair Lina Khan issued a stark warning that advanced artificial intelligence tools could lead to a “turbocharging” of consumer harms, including sophisticated fraud and scams. Khan emphasized that the U.S. government already possesses substantial authority to address AI-driven misconduct under long-standing laws, and the agency is prepared to act.

The rapid emergence of generative AI, capable of producing convincing text, images, and audio, has raised significant concerns about its potential for deception and impersonation. While these technologies promise innovation, the FTC is focused on their misuse. “The turbocharging of fraud and scams that could be enabled by these tools are a serious concern,” Khan told House lawmakers. This scrutiny comes as the public witnesses the powerful capabilities of new technologies, much like when a major platform such as Netflix is winding down a popular service, shifting the digital landscape and creating new vectors for risk.

Commissioners stressed that the debate over future AI-specific regulations will not delay current enforcement. Companies are already subject to investigation under existing statutes concerning unfair, deceptive, and discriminatory practices. “Our obligation is to do what’ve always done, which is to apply the tools we have to these changing technologies,” said FTC Commissioner Rebecca Kelly Slaughter, noting the agency’s history of adapting to technological change.

FTC Commissioner Alvaro Bedoya explicitly rejected the notion that algorithmic complexity grants immunity. “Companies cannot escape liability simply by claiming that their algorithms are a black box,” Bedoya stated. He affirmed that laws against unfair practices and for civil rights, such as the Equal Credit Opportunity Act, fully apply to AI systems. The agency’s stance is that there is law, and companies will need to abide by it, regardless of technological novelty. This principle holds true across sectors, just as Dominion still has its legal avenues to pursue, or as serious allegations demand scrutiny, whether they are some on-air claims or complex algorithmic outcomes.

The FTC has previously issued guidance to AI developers and is actively monitoring the space. Last month, the agency received a formal request to investigate OpenAI, the creator of ChatGPT, over allegations that the company misled users about the tool’s capabilities and limitations. This action underscores the FTC’s commitment to preemptively address consumer harms before they scale, a vigilance as critical in technology as it is in other areas of public safety, where tragedies like when a 13-year-old dies after a medical incident prompt urgent examination of all responsible systems.