The US FTC accused DoNotPay and five other AI companies of exaggerating their technology to deceive consumers

The Federal Trade Commission is reminding companies that there are serious consequences for trying to deceive consumers by overstating the capabilities of artificial intelligence. The FTC announced Tuesday that it has filed lawsuits against five companies, alleging that they used the hype of artificial intelligence to offer deceptive services to consumers. "It is illegal to use AI tools to deceive, mislead, or defraud people," said FTC Chair Lina Khan. "The FTC's enforcement actions make it clear that AI is also subject to the law." The companies named by the FTC include DoNotPay, which provides AI robot lawyer services, and Ascend Ecom, which sells AI tools that claim to help consumers quickly earn passive income, as well as Ecommerce Empire Builders, which claims to help consumers build an "AI-powered e-commerce empire" for fees starting at $2,000, and Rytr, a free generative AI writing platform that the FTC says is a tool for generating fake customer reviews that is being used to "pollute the market." Another company, FBA Machine (formerly Passive Scaling), promised consumers that they could run "seven-figure" businesses, citing clients earning more than $100,000 per month. The FTC said the scheme cost consumers more than $15.9 million based on deceptive income claims. A federal judge issued a temporary cease and desist order against Ascend Ecom, Ecommerce Empire Builders and FBA Machine, placing the companies under the control of a court-ordered receiver. The FTC said further action against DoNotPay and Rytr is pending. It is understood that "AI washing" refers to a marketing method in which companies exaggerate or falsely promote their products or services and the use of artificial intelligence. They try to make the product look more advanced or innovative than it actually is.