FTC cracks down on DoNotPay, others for 'deceptive AI claims and schemes'

• The Federal Trade Commission announced a crackdown on what the regulator called "deceptive AI claims and schemes" by three business opportunity ventures and two companies, including the legal services firm DoNotPay.
• The FTC said the five enforcement cases it has filed show how the companies and ventures "have seized on the hype surrounding" artificial intelligence "and are using it to lure consumers into bogus schemes."
• "Using AI tools to trick, mislead, or defraud people is illegal," FTC Chair Lina Khan said in a statement.

The Federal Trade Commission on Wednesday announced a crackdown on what the regulator called "deceptive AI claims and schemes" by three business opportunity ventures and two companies, including the legal services firm DoNotPay.

The FTC said the five enforcement cases it has filed show how the companies and ventures "have seized on the hype surrounding" artificial intelligence "and are using it to lure consumers into bogus schemes."

"Using AI tools to trick, mislead, or defraud people is illegal," FTC Chair Lina Khan said in a statement.

"The FTC's enforcement actions make clear that there is no AI exemption from the laws on the book," Khan said. "By cracking down on unfair or deceptive practices in these markets, FTC is ensuring that honest businesses and innovators can get a fair shot and consumers are being protected."

In a complaint, the FTC said that DoNotPay, which touted its AI service as "the world's first robot lawyer," failed to live up to that claim.

While DoNotPay said its service would allow customers to sue someone for assault without an attorney, and generate valid legal documents in "no time," the company did not test whether its AI chatbot's "output was equal to the level of a human