FTC Issues Final Rule Targeting Fake Consumer Reviews and Testimonials, Including Those Generated by Artificial Intelligence AI and Online Bots

This is indicative of the vast sums of money available in the scalper bot economy, where profitability trumps the risk. One could speculate the role social media has played in creating this environment, given Millennials are the demographic most inclined to utilize bots. We live in a world of instant gratification, where consumerism is in hyper-drive, and being seen at an event while wearing the right clothes is perceived to be as essential as oxygen.

The FTC noted that the Supreme Court’s unanimous ruling in AMG Capital Management, LLC v. FTC, 593 U.S. 67 (2021) had hindered the FTC’s ability to seek monetary damages, such as restitution or disgorgement of profits, against violators. The Rule now enables the FTC to seek monetary relief for consumers up to $52,000 per violation—yet enables courts to impose lower per-violation penalties—when businesses buy or sell fake reviews and testimonials. Regardless of what happens next, the Oasis debacle could shed another light on what fans go through to get concert tickets. Despite the fact that the US Congress passed the Better Online Ticket Sales (BOTS) Act in 2016 and the European Union voted to ban bots in 2019, they’ve been far from eradicated. Many companies still rely on ineffective anti-bot defenses that cannot detect automated abuse against their customers’ account login,” he said.

It also gave the Federal Trade Commission authority to enforce the law. The FTC, however, has only used the BOTS Act to take law enforcement action once, against three New York ticket brokers, in January 2021. The agency said the defendants will pay $3.7 million in civil penalties. The entertainment industry has had high-profile debates over the use of bots, which allow resellers to boost the price and profit from the tickets, while leaving true fans paying higher prices. Other victims were still active on Twitter when Devumi-sold bots began impersonating them. Salle Ingle, a 40-year-old engineer who lives in Colorado, said she worried that a potential employer would come across the fake version of her while vetting her social media accounts.

Whichever type you use, proxies are an important part of setting up a bot. In some cases, like when a website has very strong anti-botting software, it is better not to even use a bot at all. These monitor the number of times a specific transaction data element occurs within certain intervals. An example would be an agreement between Reddit bots for buying online and Google to let Google use the gathered data to build large language models (LLMs) to train Google AI. A few years ago, Davie decided to use his programming skills to improve cybersecurity outcomes and protect e-commerce platforms. That came as he changed his focus to raising a family and working in a career that helped many more people.

That seems to be the thinking of a coalition of U.S. lawmakers who, on Monday, reintroduced proposed legislation seeking to prevent automated bot accounts from dominating online sales. Dubbed the Stopping Grinch Bots Act, the measure aims to prevent what are in effect scalpers for physical goods ahead of the holiday season. But beyond individuals who just want to get dresses or sneakers because they sell out, there is the booming reseller market competing for purchases too, who sell thousands and thousands of products. Each of these self-taught bot makers have sold over $380,000 worth of bots since their businesses launched, according to screenshots of payment dashboards viewed by Insider. Splashforce, a bot that services nearly 4,000 customers, was created by an 18-year-old who had previously described himself as “dirt poor.” The teen founder and co-owner of Adept, another major sneaker bot, initially earned money via a paper route.

Gov. Katie Hobbs signed legislation that could prevent bots from buying tickets and regulate resale tickets

It’s not illegal, but it does violate some retailers’ policies, as it is certainly detrimental to a retailer’s business. While scalping and rapid-fire fraud attacks use similar technology and have a similar intent, there are key differences. Scalping of products is not expressly illegal, whereas rapid-fire fraud, by definition, is a crime. That trend helps explain why bot attacks on ecommerce enterprises are on the rise. As much as 70% of traffic to ecommerce checkout pages is generated by malicious bots, according to Javelin Strategy & Research. Signifyd also has seen a substantial increase in bot attacks in the last year on its Commerce Protection Platform.

State Reps. Mike McFall, D-Hazel Park, and Graham Filler, R-Clinton County, introduced two so-called Taylor Swift bills. The BBC reported that some tickets were going for as much as $7,800. AI-driven super bots comprised 33% of observed activity and employed advanced evasion techniques to bypass traditional detection tools. These top-level automated attacks on e-commerce revenue, customers, and brands generate increasingly steep financial losses and network security breaches.

And it’s not just the exchanges seemingly dodging the fraud issue. “It’s too embarrassing for them to admit that they purchased fraudulent inventory.” He cites one rare attempt to sue by Uber, after it discovered Austin-based advertising company Phunware was selling fake app installs using bots. If you want to set a low price, and you want your fans to all have a chance to buy at that price, raise the quantity.

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However, Platt said he did not think a ban would stop the bots completely because some groups were operating across borders. Netacea recently came across the most expensive retail bot it had ever encountered, which was selling for $27,500 (£20,000). “That is a very specific bot that will target numerous things,” Platt said. Consumers are being warned of a surge in the use ChatGPT of computer software that lets internet profiteers snap up in-demand items in bulk – from games consoles to home exercise equipment – at the expense of genuine shoppers. New bots are developed constantly and can often be found on dedicated subreddits, Twitter, online sneaker forums, and YouTube. But Alex says his biggest competition are the manufacturers themselves.

State lawmakers want to crack down on individuals using automated software programs, or bots, to snag concert tickets and drive prices for highly sought-after performers. You can foun additiona information about ai customer service and artificial intelligence and NLP. It reveals 47% of respondents believe bots have stopped them getting in-demand goods and services online. Many of those affected (58%) were trying to buy tickets for a live event, but buyers of fashion items (35%), consumer goods (39%) and travel (20%) also suspected high levels of interference.

• The company issued an apology on Friday, Jan. 26 after people shared their frustrations over the situation online, but it appears as if a lot of fans had to resort to buying tickets from resale vendors.
• Nike teamed with Virgil Abloh’s Off-White to put a new spin on popular shoes from the company’s archives.
• According to the online fraud protection firm DataDome, between 2015 and 2016, one botter was able to snatch up 30,000 tickets to the Broadway show “Hamilton” and more than a thousand tickets to a U2 concert.
• “We may have to go manual,” said Trevor Roskovensky, a sneaker buyer, in a YouTube video of him trying to buy the shoe live.
• Fake Chrome bots remain the most difficult type of simple bot to detect, according to DataDome.
• One bot, called CyberAIO, has gained notoriety as a surefire way to nab the most coveted collectibles in the $42 billion sneakerhead business.

But even if Harris wins, it’s not clear what she may decide to do. Oddly enough, Trump’s vice presidential candidate JD Vance has praised Khan for her anti-Big Tech stances, as the New York Times recently pointed out. The FTC has been on a tear during the Biden years, beefing up enforcement of rules intended to protect consumers, attempting to crack down on scams, and keeping companies in check.

“We have found multiple entities within China trying to do the exact same thing. Let’s just say on OpenAI, where they are trying to scrape the system or use the APIs to get more data without having any agreement or payment terms with OpenAI,” he clarified. If you do that repeatedly, make it a practice, it becomes an abuse. Your intent essentially is to be able to defraud the company, Jain explained. “Instead of just attacking a couple of websites, now I am protecting sort of 50-plus websites. In 2024, plenty of diners are willing to part with six hundred bucks for a table, too, but they are likely paying it to a stranger, via an app.

In our first 24 hours we had over 500 checkouts of Switches,” a representative for Phantom told Motherboard in an email. Admins for Scottbot and Swift did not respond to a request for comment. “Me and my friends were talking about reselling Nintendo Switches, and at one point my friend, nicknamed Bird, told me I should make a bot.

Looking at geographic cyberfraud trends, DataDome found that regionally, Europe is the least protected against simple bot attacks, with 68% of websites unprotected and only 8% fully protected. North America follows closely behind, with 64% of websites unprotected and only 9% fully protected. In January, after almost two years of promoting hundreds of Devumi customers, the fake Jessica Rychly account was finally flagged by Twitter’s security algorithms.

Nike Inc, a major target of resellers, has come up with creative ways to battle the bots, such as giving established members on its SNKRS app the chance to reserve shoes that they can pick up at a Nike store. Some customers said the company’s website crashed when they tried to buy one of the new consoles. Walmart said that despite heavy traffic, its site stayed online. Others have spread out availability or offered products only to a handful of established customers. The good news is that the technology to help with scalping and rapid-fire fraud is available—and effective.

These fake accounts, known as bots, can help sway advertising audiences and reshape political debates. Like lots of money-making opportunities in online shopping, many of these resellers aren’t just stumbling upon their in-demand product of choice. Instead, developers are creating dedicated tools to automatically buy Switches from stores when they come back in stock, and before others get a chance to. Motherboard has traced some of the bulk Switch buying to a community revolving around a new, particular bot. Hundreds of people looking to jump on the gold rush or who are just desperate to get their hands on a Switch for themselves have joined a Discord group where users share tips on how to effectively use the tool. They buy up those concert tickets you wanted, so they can then scalp them to you at an outrageous markup.

People are gradually waking up to the scale of the scalper bot problem and there is an appetite for accountability. 88% of Americans said that retailers should have technology in place to stop scalper bots, and 82% believe that Government regulation should clamp down on the use of scalper bots. More money is poured into the bot economy, fueling further illegal activity and enabling the innovation of greater, sophisticated tooling that can circumvent ChatGPT App existing defenses and perpetuate the challenge faced by customers and businesses alike. There is, after all, a reason that using scalper bots to buy and sell tickets is illegal. Netacea’s research discovered that 26% of 18 – 35-year-olds admit they have resorted to using a bot in the last year, with a total of 1 in 6 Americans stating that they have used a bot. It’s not an understatement to say that AI is everywhere, especially online.

“While they have to act like they’re trying to stop bots, it’s making them a huge profit,” he said. Many prominent botters run multiple types of bots for major releases, because each one has different strengths and weaknesses. Some botters rent dozens of computer servers in the same facilities as the retailers to save milliseconds on data latency. He experimented with other technologies and taught himself how to code.

So do Michael Dell, the computer billionaire, and Ray Lewis, the football commentator and former Ravens linebacker. Mixed with low stock availability, sporadic releases by retailers and website crashes due to floods of internet traffic, many consumers have been unable to get a console before Christmas, and experts forecast the situation may continue into 2021. According to CNBC, Americans are purchasing more from scalpers than ever before.

Like the NCL, Budish, who in 2019 gave an FTC keynote on the online tickets market, said he supports efforts like the Stopping Grinch Bots Acts and emphasized the importance of action. There are a few of reasons people will regularly miss out on hyped sneakers drops. This proportion of the bot traffic depends on the specific vertical, and the use cases differ in e-commerce versus banking versus the tech industry, he added. However, he never crossed over the line into fraudulently using stolen credentials to make purchases.

Jesse Einhorn, a senior economist at StockX, said the Swoosh curve reflects supply-and-demand dynamics and ultimately the upward pressure on sneaker prices as fewer unworn so-called “deadstock” or sold out pairs remain. It’s this situation we’re in where most of the tickets flow through bots and then the secondary market, both of whom are collecting a big fee, that doesn’t make a whole lot of sense. Some members of the Discord group indicated they don’t only rely on online-shopping, but use websites such as Brickseek to see which physical stores near them have new Switch stock, and then travel to buy those up as well. I learned, in the process of fighting for the console, that scarcity is not scarce. Sometimes it’s deliberately built into sales, other times it’s brought on by a worldwide pandemic. The problem is it’s not necessarily the manufacturers or retailers that end up hurt or disappointed by demand.

(Think of it as a sort of Netflix, but purely for buying shoes.) Lucas, however, grants no more than 100 licenses a month, which keeps them a hot commodity. The bot is so effective at buying exclusive sneakers online that the people tasked with supporting it don’t even want a salary. They just want to use the bot to nab the latest pair of sneakers themselves. The next time you’re at your computer waiting for the newest pair of exclusive Yeezy sneakers to drop, keep in mind that you’re surrounded by

bots

that are faster and more effective at hitting the buy button on those limited-edition shoes. Texas’ senior U.S. senator, John Cornyn, said he is proposing a federal bill that would require ticket seller and reseller websites to disclose all prices and fees before purchases in response to the ticket fiasco. Sierra Greenslade was one of the anxious fans watching the ticket debacle unfold on social media while her friend waited in the ticket queue.

This minuscule expense tips the scales in favor of the attacker because it makes attacks very inexpensive. Meanwhile, the defenders spend lots of money in mitigation attempts and cannot pivot as quickly, Rieniets said. Additionally, organizations providing public LLMs use web scrapers aggressively to train their models.

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Over the last decade, most major sneaker brands have turned to high-profile collaborations. Kanye West worked with Nike and Adidas on realizing his vision for Yeezys. Nike teamed with Virgil Abloh’s Off-White to put a new spin on popular shoes from the company’s archives.

“Prior to that, advertisers would buy ads from publishers like The New York Times,” he says. But now it’s typical for brands to approach a digital ad exchange—which facilitates the buying and selling of advertising from different ad networks—to place their adverts on huge numbers of websites and apps. And it is this part of the system that has become vulnerable to bots, claims Fou.

They are used to obtain anything in high demand with limited supply. During the pandemic, people amassed stockpiles of video game consoles, graphics chips and even children’s furniture using bots. For Shopify, the Canadian e-commerce giant behind dozens of the buzziest sneaker boutiques (including Bodega), protecting against a bot onslaught is a part of keeping sites up and running. If businesses cannot determine the difference between real customers and bots, this can make marketing analytics data useless.

Essentially, if the bot user commits no fraud, using bots is not illegal, he offered. Mitch Davie is now a renowned global leader in bot management and account security. A friend invited him to the programming opportunity about eight years ago. That group was among the first in Australia to employ code automation techniques on e-commerce sites. The “Taylor Swift bill,” formally known as House Bill 2040, says that anyone caught making bots for purchasing tickets, using multiple IP addresses, or disabling security or ticket sale regulations could be charged up to $10,000 per violation. According to the legislation, a violation is acquired per ticket.

Information collected through online shopping might also mean shoppers will begin their customer service journey with a robot so sophisticated it acts like a human being. With a chat bot in place, about 30 to 50 percent of customer inquiries are resolved, said Steve Laughlin, IBM’s general manager for the global consumer industry. Of most concern is that over two-thirds of businesses think that web application firewalls (WAFs) and distributed denial of service (DDoS) protection will keep them secure against bot attacks. These tools are valuable and recommended, but they are not effective against sophisticated bots — leaving businesses vulnerable to attacks that may be the difference between profit and loss. Bot traffic costs businesses millions each year, whether they are scraping content, buying up goods before anyone else or using stolen passwords to take over accounts. New research from Netacea shows that bots cost businesses an average of 3.6% of their online revenue, but the problems run deeper.

• The entertainment industry has had high-profile debates over the use of bots, which allow resellers to boost the price and profit from the tickets, while leaving true fans paying higher prices.
• Scalper bots circumvent traditional detection methods and controls to buy any in-demand item imaginable, faster than any could, to be resold at a profit.
• Some, for example, do not accept credit cards, only cryptocurrencies like Bitcoin.
• Extrapolated across the US eCommerce market, worth an estimated $277bn per quarter, an incalculable number of people are exposed to financial and ethical harm because of scalper bot activity.

Manufactured scarcity is crucial to a bot’s notoriety, says a person who knows the sneaker industry and asked to remain anonymous for employment concerns. It lets us imagine the sea of PS5s that could be ours, if only we could breach through that locked door. This was during the height of the pandemic when Fuat was stuck at home, plugging away at his day job in IT, looking for any sort of distraction. The Twitter account “Dakoza Success” proudly promotes all of the bounties scored by the bot’s users. In one memorable post, one lucky rounder shows off nine freshly purchased GeForce RTX 3080s stacked to the ceiling like LEGO bricks. It’s an image that evokes an enfeebling combination of envy and rage, as it becomes increasingly clear that the botters are perpetually one step ahead of our mere keyboards and mouses.

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It doesn’t do anybody any good to pretend the price is 5 grand if it’s 180 grand. Nate said some people have contacted him in his direct messages and Discord, upset that he is helping the resellers, too. “Phantom currently supports Best Buy with more future sites to be added.

According to Davie, cybersecurity firms like Arkose Labs specialize in advanced defensive measures to protect e-commerce sites from bot activity. They use constantly updated highly advanced detection technology. “If you look across the traffic on the internet, there are multiple reports and sites, including our own data, that 40% of the traffic you can see on the website would essentially be bots,” Jain told the E-Commerce Times. Like many hot restaurants, Roscioli usually has tables for famous people, investors, other chefs, and regulars. But most are snapped up on Resy as soon as they become available. Amelia Giordano, Roscioli’s reservationist, invited me to sit with her in the empty restaurant, the walls lined with bottles of wine, and watch her iPad’s screen as the tables filled up for fourteen days hence.

“I decided to make it as a joke, but I quickly realized just how powerful it could be,” Nate, the creator of Bird Bot, the open source tool for quickly purchasing Switches, told Motherboard in an online chat. More recent iterations of his bot don’t scan for keywords, but listen in for changes behind the scenes. Jeremy’s bot now listens in for these changes, then push alerts to his Twitter and Discord immediately. Combined with the extremely high interest in the PS5 (and the Xbox Series X, for that matter), the chip shortage created a console scarcity the likes of which has never really been seen before. “It’s a temporary and non-deliberate scarcity,” says Jason Pallant, a lecturer in marketing at Swinburne University of Technology in Australia.

Yet Twitter has not imposed seemingly simple safeguards that would help throttle bot manufacturers, such as requiring anyone signing up for a new account to pass an anti-spam test, as many commercial sites do. As a result, Twitter now hosts vast swaths of unused accounts, including what are probably dormant accounts controlled by bot makers. Ms. Binns, the Twitter spokeswoman, said the company did not proactively review accounts to see if they were impersonating other users.