The Federal Trade Commission is taking action against companies it says have used artificial intelligence to deceive the public.
The agency on Wednesday described five actions it had taken against companies it said were involved in various types of “deceptive or unfair conduct that harms consumers.”
The alleged schemes included promoting an AI tool that enabled customers to create fake reviews, advertising an AI lawyer that couldn’t live up to real-world attorneys and failing to deliver on promises made about AI-assisted e-commerce businesses.
The agency said it was going after the companies under its new law enforcement sweep: Operation AI Comply.
“Using AI tools to trick, mislead, or defraud people is illegal,” FTC Chair Lina M. Khan said in a statement. “The FTC’s enforcement actions make clear that there is no AI exemption from the laws on the books.”
One of the companies singled out by the FTC, DoNotPay, claimed to offer an AI service billed as the “world’s first robot lawyer.” The company said its service allowed customers to “sue for assault without a lawyer” and quickly generate legal documents with AI.
The company’s website says it uses artificial intelligence “to help consumers fight against large corporations and solve their problems, like beating parking tickets, appealing bank fees, and stopping robocallers.”
“DoNotPay’s goal is to level the playing field and make legal information and self-help accessible to everyone,” the site says.
Its subscription service costs $36 every two months, with older subscribers being “grandfathered in to cheaper plans,” the website says.
The FTC said DoNotPay’s service failed to live up to its claims and wrote in a complaint against the company that it “did not conduct testing to determine whether its AI chatbot’s output was equal to the level of a human lawyer, and that the company itself did not hire or retain any attorneys.”
A spokeswoman for the company said in a statement Wednesday that DoNotPay “worked constructively with the FTC to settle this case and fully resolve these issues, without admitting liability.”
“The complaint relates to the usage of a few hundred customers some years ago (out of millions of people), with services that have long been discontinued,” the spokeswoman said.
The FTC also filed a complaint against an online company that provides AI writing assistance tools. Rytr violated the FTC Act when it provided subscribers with the means to generate deceptive and false written content for consumer reviews, the agency said.
The company — which offers three different subscription plans that go up to $24.16 per month — could not immediately be reached for comment.
The FTC filed a proposed order to the company that would prevent it from marketing or selling any service that generates or promotes consumer reviews or testimonials.
The federal agency also went after several schemes that allegedly claimed to use AI to help consumers make money. According to the FTC, Ascend Ecom allegedly promised that its AI-powered tools would help consumers quickly earn thousands of dollars a month in passive income by opening online storefronts.
The FTC alleges that the scheme defrauded consumers of at least $25 million. The website and Facebook page for Ascend Ecom appears to have been removed.
“The complaint notes that, while Ascend promises consumers it will create stores producing five-figure monthly income by the second year, for nearly all consumers, the promised gains never materialize,” the FTC said. “Consumers are left with depleted bank accounts and hefty credit card bills.”
Ascend allegedly pressured consumers to delete or change negative reviews and “unlawfully threatened” to withhold a supposed guaranteed buyback for those who failed to comply, the news release states.
Another alleged scheme, Ecommerce Empire Builders, gave consumers the false hope that they could build an AI-powered e-commerce empire by participating in its training program costing around $2,000 or purchasing a “done for you” online storefront that cost tens of thousands of dollars, according to the FTC.
The federal agency said the company’s CEO allegedly used the money from consumers “to enrich himself while failing to deliver on the scheme’s promises of big incomes by selling goods online.”
Ecommerce Empire Builders could not immediately be reached for comment.
Khan, the FTC Chair, said that by going after companies that use unfair or deceptive AI tools, the FTC “is ensuring that honest businesses and innovators can get a fair shot and consumers are being protected.”
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