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the us ftc has taken action to rectify ai chaos: "robot lawyer" company was fined $193,000 for false advertising

2024-09-26

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it home reported on september 26 that the u.s. federal trade commission (ftc) announced on tuesday that donotpay, a company claiming to provide the "world's first robot lawyer," has agreed to a $193,000 (it home note: currently about 1.357 million rmb) settlement with the agency. the move is part of the ftc's newly launched enforcement action "operation ai comply" to crack down on companies that use ai services to deceive or defraud consumers.

according to the ftc’s complaint, donotpay claims to “replace the $200 billion legal industry with artificial intelligence” and says its “robot lawyers” can replace the expertise and output of human lawyers to generate legal documents. however, the ftc said the company made such claims without any testing to support them. the complaint states:

none of the service’s technology has been trained to stay current on the full and latest federal and state laws, regulations, and judicial decisions, or to apply those laws to fact patterns. donotpay’s employees do not test the quality and accuracy of the legal documents and advice generated by the service’s majority law-related features. donotpay does not employ an attorney, nor has it engaged an attorney, or an attorney with relevant legal expertise, to test the quality and accuracy of the service’s law-related features.

the complaint also alleges that the company even told consumers they could use the company’s ai service to sue personal assaults without hiring a human lawyer, and that the company could check small business websites for legal violations based solely on a consumer’s email address. donotpay claimed this would save businesses $125,000 in legal fees, but the ftc said the service was ineffective.

the ftc said donotpay has agreed to pay $193,000 to settle charges and to warn consumers who subscribe to the service between 2021 and 2023 about the limitations of its law-related products. donotpay also will not be allowed to claim that it can replace any professional services unless it provides evidence.

the ftc also announced actions against other companies that used artificial intelligence services to mislead consumers. among them was rytr, an ai “writing assistant” service that the ftc said provided subscribers with tools to create ai-generated fake reviews.