Operation AI Comply has come out swinging against five companies the FTC says are peddling 'deceptive AI claims and schemes'
The internet is awash with companies using the «magic-in-a-box» nature of AI to hype their often-dubious products, and it seems like the Federal Trade Commission is finally taking action. The US government consumer protection agency has announced Operation AI Comply to combat «operations that use AI hype or sell AI technology that can be used in deceptive and unfair ways,» kicking things off with five companies that it reckons have fallen foul of existing consumer protection laws.
Top of the list is DoNotPay, an AI legal assistant that the FTC says did not deliver on its promises to «sue for assault with a lawyer» and «replace the $200-billion-dollar legal industry with artificial intelligence.» The complaint alleges that DoNotPay offered a service that it claimed would check a small business website for «hundreds of federal and state law violations», which the FTC says was not effective, along with allegations of a lack of testing to determine if the output was equal to the level of a human lawyer.
DoNotPay has reportedly agreed to a settlement requiring it to pay $193,000 in fines, along with providing a notice to consumers who made use of the AI features between 2021 and 2023 warning them of the limitations of its service.
The FTC has also filed against Ascend Ecom, a company it describes as an «online business opportunity scheme» (if that description doesn't set off red flags, I don't know what will) that the FTC alleges «defrauded consumers of at least $25 million» and promised to produce a five-figure monthly income by the second year of subscription.
Also on the list is Ecommerce Empire Builders—a name that seems like it should set off sirens and tip a bucket of water over your head at its mere mention—Rytr, an AI writing assistant that allegedly writes deceiving reviews, and FBA Machine, «a business opportunity scheme that allegedly falsely promised consumers that they would make guaranteed income through online storefronts that utilized AI-powered
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