FTC Targets Companies Allegedly Using AI to Deceive Consumers

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  • The FTC announced the launch of “Operation AI Comply,” which includes enforcement actions filed against companies alleged to have used AI while engaging in unfair or deceptive conduct harming consumers.
  • The enforcement actions include a lawsuit and proposed consent order against DoNotPay, Inc. to resolve allegations that it failed to test the quality and accuracy of the assistance provided by its AI-powered civil legal services; a lawsuit and proposed consent order against Rytr LLC, to resolve allegations that it marketed and sold an AI “writing assistant” that generates false and deceptive written content for consumer reviews; and lawsuits against Ascend Capventures Inc., Empire Holdings Group LLC, TheFBAMachine Inc., and related entities for allegedly claiming that their AI-powered tools would assist consumers in earning passive income though online storefronts.
  • We have recently covered other AI-related regulatory and enforcement actions, including AG Paxton’s settlement with a generative AI healthcare company over safety and accuracy concerns; the passage of a Colorado law regulating the use of AI-generated “deepfakes” in political messaging; and a comment letter submitted by 15 Republican AGs arguing for regulation of AI in the financial services sector.
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