The FTC is stepping up its fight against fake AI claims and scams

What you need to know

The FTC has taken legal action against companies that make false AI claims or offer technologies that are easily misused.
His new initiative, Operation AI Comply, has uncovered five cases of AI being used for shady practices, including a “robot lawyer,” fake reviews, and questionable online storefronts.
DoNotPay, for example, has been criticized for claiming to have the “world’s first robot lawyer” that can sue anyone with a click.

The Federal Trade Commission is cracking down on deceptive AI practices and has taken legal action against companies that make false AI claims or offer technologies that can easily be used for fraud.

Operation AI Comply, the FTC's new program, has uncovered five cases in which companies used AI to promote fraudulent practices. These include a so-called “robot lawyer”, AI-generated fake reviews and shady online shops.

One case involves DoNotPay, which claimed to have the “world’s first robot lawyer” that could sue anyone with just one click. Now the FTC is investigating the company for not keeping its promises.

DoNotPay offered services such as using a virtual card to bypass free trial fees and file complaints against companies. However, the FTC claims it has overstated its capabilities, claiming that users can “sue for personal injury without an attorney” and quickly create valid legal documents.

The FTC has criticized DoNotPay for unfounded claims that its “robot lawyers” could replace human lawyers in drafting legal documents. DoNotPay had claimed it would “replace the $200 billion legal industry with artificial intelligence.”

However, the FTC argues that DoNotPay had no evidence to support these claims. As a result, the company has agreed to a $193,000 settlement with the FTC.

The FTC is also cracking down on companies that claimed AI could help people profit from online storefronts. One case involves Ascend Ecom, which allegedly misled individuals about their earning potential to entice them to invest in “risk-free” AI-driven business opportunities. The FTC alleges that Ascend Ecom failed to honor its money-back guarantees when these investments failed to pay off.

In addition to the companies already mentioned, Ecommerce Empire Builders, Rytr and FBA Machine are also being investigated by the FTC. The complaint against Rytr shows that subscribers could use its AI platform to generate misleading fake reviews full of false information that could mislead consumers. Some users ended up creating thousands of these questionable reviews.

Meanwhile, Ecommerce Empire Builders and FBA Machine claim that customers can make money by investing in AI-powered online businesses. However, the FTC claims that Ecommerce Empire Builders forces customers to sign contracts that prevent them from leaving negative reviews.

The FTC is stepping up its fight against fake AI claims and scams

What you need to know

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The FTC is stepping up its fight against fake AI claims and scams

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