Among the first artificial intelligence companies the Federal Trade Commission (FTC) has called out for misleading consumers is DoNotPay—initially touted as “the world’s first robot lawyer” capable of allowing users to “sue anyone with the click of a button.”
On Wednesday, the FTC announced it took action against DoNotPay after learning the startup had not conducted any testing to verify whether its AI chatbot’s output matched the efficacy of a human lawyer. Additionally, DoNotPay did not hire or require attorneys to validate its AI-generated legal advice.
Although DoNotPay accepted no liability, the company agreed to pay $193,000 to resolve the charges, contingent on the FTC’s consent agreement being ratified following a 30-day public comment period. Additionally, the company will warn consumers who subscribed between 2021 and 2023 about the limitations of the legal features offered.
Under the settlement, DoNotPay is also prohibited from making unsupported claims about its services’ equivalence to professional legal services.
A DoNotPay spokesperson stated, “The complaint relates to the usage of a few hundred customers some years ago (out of millions of people), with services that have long been discontinued.” The spokesperson added, “The company is pleased to have worked constructively with the FTC to settle this case and fully resolve these issues, without admitting liability.”
The FTC’s settlement with DoNotPay is part of a broader initiative to clamp down on deceptive AI claims. On Wednesday, four other AI companies were targeted by FTC enforcement actions as part of “Operation AI Comply.” FTC Chair Lina Khan emphasized that the agency will continue to monitor companies that aim to “lure consumers into bogus schemes” or use AI to “turbocharge deception.”
“Using AI tools to trick, mislead, or defraud people is illegal,” Khan stated. “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.”
Initially released in 2015 as a tool to contest parking tickets, DoNotPay quickly expanded to cover 200 areas of law, offering help with breaches of contract, restraining orders, insurance claims, and even divorce settlements. Despite CEO Joshua Browder’s claims to the ABA Journal in 2018 that the company’s services were provided without lawyer oversight, DoNotPay faced mounting scrutiny. Browder acknowledged legal risks but believed offering free services would mitigate potential legal challenges.
According to the FTC complaint, in 2019, DoNotPay started charging subscribers $36 every two months and made several false claims in advertisements to boost subscriptions.
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