As part of Operation AI Comply, the Federal Trade Commission (FTC) announced five cases exposing alleged AI-related deception — one of which includes actions against a company called DoNotPay.
The company offered a service that was supposedly “the world’s first robot lawyer,” claiming to sue anyone with a press of a button.
On its website, DoNotPay said it would give “power to people” against big corporations by “using AI to charge fees, collect debts and spam consumers.”
But now, the company itself faces scrutiny after the FTC alleged that DoNotPay failed to keep up with its promises. The services offered by the company included everything from using a virtual card for free trials to filing a complaint against any company. According to the FTC, DoNotPay claimed its users could even “sue for assault without a lawyer” and “generate perfectly valid legal documents in no time.”
It also made claims of replacing “the $200-billion-dollar legal industry with artificial intelligence.” According to the FTC’s complaint, DoNotPay never tested whether its law-related features operated like a human lawyer, and subscribers who used the law-related features complained that they were not asked to submit information relevant to their claims, according to the accusations.
FTC said, “DoNotPay employees have not tested the quality and accuracy of the legal documents and advice generated by most of the Service’s law-related features. DoNotPay has not employed attorneys and has not retained attorneys, let alone attorneys with the relevant legal expertise, to test the quality and accuracy of the Service’s law-related features.”
“Using AI tools to trick, mislead, or defraud people is illegal,” said FTC Chair Lina Khan in a press release. “The FTC’s enforcement actions make clear that there is no AI exemption from the laws on the books. 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.”
DoNotPay has agreed to the Commission’s order. The settlement includes payment of $193,000 and a notice issued to subscribers between 2021 and 2023, warning them about the limitations of law-related features. In addition, the order prohibits the company from making any false claims of substituting professional service without any evidence.
Additionally, the FTC filed lawsuits against four other companies, including Ascend Ecom, an online business that allegedly falsely claimed its “cutting AI technology” would help consumers earn passive income of thousands of dollars per month. Other companies facing FTC scrutiny are Ecommerce Empire Builders, Rytr, and FBA Machine.
