FTC Cracks Down on Companies With Deceptive AI Practices and Claims

The U.S. Federal Trade Commission (FTC) has taken action against five companies accused of using artificial intelligence in deceptive and unfair ways. The enforcement includes three businesses that falsely claimed to help consumers generate passive income through e-commerce storefronts. Additionally, the FTC settled with DoNotPay, which claimed to offer automated legal services, and Rytr, an AI writing tool accused of enabling fake product reviews.

“Using AI tools to trick, mislead, or defraud people is illegal,” said FTC Chair Lina M. Khan. “The FTC's enforcement actions make clear that there is no AI exemption from the laws on the books.”

These cases serve as a reminder that AI technology must be used responsibly and ethically, with no exemptions from consumer protection regulations.