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FTC Concentrating Enforcement Efforts on Use of AI in Operation AI Comply
- The FTC has launched a new operation, called AI Comply, and filed five enforcement actions against companies who have been using AI to deceive consumers.
- DoNotPay, one of the targeted companies, did not test whether its AI chatbot's output was equal to a human lawyer and did not hire any lawyers.
- DoNotPay will pay a fine of $193k, give notice to subscribers of the limitations of the service, and abstain from making claims without evidence.
- Ascend Ecom, accused of falsely claiming to use AI to help customers make money quickly, has been sued by FTC for defrauding customers of $25M.
- Ecommerce Empire Builders has been sued by the FTC for falsely claiming to offer programs that help consumers build an 'AI-powered Ecommerce Empire.' The company's CEO has allegedly used customers' money for personal gain and not returned the promised profits.
- Rytr has been sued by the FTC for providing a writing assistant service that produces false and deceptive written content for consumer reviews.
- FBA Machine claimed to make guaranteed income through storefronts that utilised AI-powered software, costing consumers more than $15.9 million. FBA Machine falsely guaranteed refunds for initial investments alongside an assurance of risk-free business.
- The enforcement actions make it evident that AI tools and services cannot be used fraudulently, and honest innovators and consumers must be protected.
- The hype of AI technology is being used by fraudsters to deceive consumers, and it is essential to be aware of new schemes.
- Consumer awareness and education is critical in preventing individuals from being duped by fraudsters who use AI.
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