H.R. 7786 — AI Fraud Accountability Act

This section amends Section 223 of the Communications Act of 1934 (47 U.S.C. 223) to establish a criminal prohibition on using digital impersonations—defined as AI-generated or technologically created visual or audio depictions indistinguishable from real individuals—to falsely pose as an identifiable or imaginary individual with intent to defraud another of money or things of value in interstate or foreign communications, punishable by fine under 18 U.S.C., imprisonment up to three years, or both. It further (1) excepts lawfully authorized law enforcement or intelligence activities; (2) applies the same penalties to intentional threats of such violations made to intimidate, coerce, extort, or cause mental distress; (3) mandates criminal forfeiture of gross proceeds or traceable property and any property used to commit or facilitate the offense, applying procedures under 21 U.S.C. 853 except subsections (a) and (d); (4) provides for extraterritorial federal jurisdiction; and (5) adds the new offense to existing defenses. (Thus, property vests in the United States upon the offense, with third-party bona fide purchasers protected via hearing.)

This section prohibits, in interstate or foreign commerce, a person from falsely posing as an identifiable or imaginary individual via digital impersonation in a manner intended to be taken as genuine, with intent to defraud another of money or anything of value, subject to exceptions for authorized law enforcement or intelligence activities of U.S., state, or local agencies. It treats such violations as a violation of a rule defining an unfair or deceptive act or practice under section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(a)(1)(B)), thereby authorizing the Federal Trade Commission (FTC) to enforce the prohibition using its full authorities, jurisdiction, powers, duties, penalties, privileges, and immunities under the FTC Act (15 U.S.C. 41 et seq.). (Thus, the FTC may pursue civil enforcement actions, including injunctions and consumer redress, without prior rulemaking.) It defines relevant terms by reference to section 223(i) of the Communications Act of 1934 (47 U.S.C. 223(i)), as added by section 2 of this Act.

This section establishes a working group, to be convened by the Director of the National Institute of Standards and Technology (NIST) not later than 30 days after enactment, to develop best practices and recommendations for the recognition, detection, prevention, and tracing of digital impersonations (i.e., AI-generated content used to commit fraud, as prohibited under new 47 U.S.C. 223(i)) used in violation of that provision and section 3(a). The working group includes representatives from the Department of Justice, Federal Trade Commission, federal/state/local law enforcement, specified private sectors (financial services, health care, retail/e-commerce, telecommunications, and digital platforms), and experts in digital forensics and artificial intelligence. This section further directs NIST to (1) hold at least one public workshop to solicit stakeholder input; (2) publish a report of the best practices and recommendations on its website within one year of enactment; (3) review and update the best practices annually beginning two years after enactment; and (4) submit annual reports to specified congressional committees summarizing working group activities. The requirements sunset 10 years after enactment.

This section directs the Federal Trade Commission (FTC), within 90 days of enactment and in consultation with the Attorney General and Secretary of State, to identify the top 10 foreign countries where violations of sections 2 or 3 most frequently originate and harm individuals in the United States or its territories. It further authorizes the FTC, in coordination with the Secretary of State, to enter into cooperation agreements with law enforcement agencies in those countries to enforce this Act—subject to requirements in section 46(j)(4)—and requires the FTC to submit annual reports to the Senate Committee on Commerce, Science, and Transportation and the House Committee on Energy and Commerce detailing new agreements, negotiations, coordination efforts, and cooperation challenges. Additionally, it directs the Attorney General to review and, as necessary, modify international agreements with law enforcement agencies in those countries within one year of enactment and every five years thereafter to aid enforcement of violations of section 223(i) of the Communications Act of 1934 (as added by section 2 of this Act), with reports every five years (initially within one year) to specified Senate and House committees including analysis, modifications pursued, and recommendations to strengthen enforcement against foreign-originated violations harming U.S. persons.

This section provides a savings clause clarifying that nothing in this Act restricts parody, satire, journalism, or other rights, privileges, or immunities protected by the First Amendment.