The post FTC Targets AI Companies for Exaggerating Their Tech in Latest Consumer Protection Sweep appeared on BitcoinEthereumNews.com.

The U.S. Federal Trade Commission is putting companies on notice—if businesses try to fool customers by overstating what their AI can do, they’ll face serious consequences. Also known as AI washing, the FTC announced Tuesday it had filed complaints against five companies that it said used the hype around AI to target consumers with deceptive offers. “Using AI tools to trick, mislead, or defraud people is illegal,” said FTC Chair Lina Khan. “The FTC’s enforcement actions make clear that there is no AI exemption from the laws on the books.” AI washing refers to a marketing scheme where companies exaggerate or make false claims about their products or services and the use of artificial intelligence. They attempt to make a product seem more advanced or innovative than it actually is. The companies named by the FTC include DoNotPay, which offers an AI-powered robot lawyer service; Ascend Ecom, touting AI-powered tools to help consumers quickly earn passive income. There was also Ecommerce Empire Builders, which claimed to help consumers build an “AI-powered Ecommerce Empire” for a fee starting at $2,000. Also named in the FTC’s document was Rytr, a free generative AI writing platform, a tool to generate fake customer reviews that were used to “pollute the marketplace,” the agency alleged. Another company, FBA Machine, formerly known as Passive Scaling, promised consumers they could operate a “seven-figure” business, citing testimonials that said clients generated over $100,000 a month in revenue.” The FTC claimed that the scheme cost consumers over $15.9 million based on deceptive earning claims. A federal judge issued a temporary cease-and-desist order against Ascend Ecom, Ecommerce Empire Builders, and FBA Machine, putting the companies under the control of a court-ordered receiver. Further actions against DoNotPay and Rytr are pending, the FTC said. “DoNotPay is pleased to have worked constructively…

---

Filed under: News - @ September 26, 2024 5:27 pm