https://arstechnica.com/tech-policy/2024/09/startup-behind-worlds-first-robot-lawyer-to-pay-193k-for-false-ads-ftc-says/

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"No lawyer oversight" --

DoNotPay has to pay $193K for falsely touting untested AI lawyer, FTC
says

You can't "sue anyone with a click of a button" without testing it
first, FTC says.

Ashley Belanger - Sep 25, 2024 8:40 pm UTC

DoNotPay has to pay $193K for falsely touting untested AI lawyer, FTC
says
Enlarge
style-photography | iStock / Getty Images Plus

reader comments

39

Among the first AI companies that the Federal Trade Commission has
exposed as deceiving consumers is DoNotPay--which initially was
advertised as "the world's first robot lawyer" with the ability to
"sue anyone with the click of a button."

On Wednesday, the FTC announced that it took action to stop DoNotPay
from making bogus claims after learning that the AI startup conducted
no testing "to determine whether its AI chatbot's output was equal to
the level of a human lawyer." DoNotPay also did not "hire or retain
any attorneys" to help verify AI outputs or validate DoNotPay's legal
claims.

DoNotPay accepted no liability. But to settle the charges that
DoNotPay violated the FTC Act, the AI startup agreed to pay $193,000
if the FTC's consent agreement is confirmed following a 30-day public
comment period. Additionally, DoNotPay agreed to warn "consumers who
subscribed to the service between 2021 and 2023" about the
"limitations of law-related features on the service," the FTC said.

Moving forward, DoNotPay would also be prohibited under the
settlement from making baseless claims that any of its features can
be substituted for any professional service.

A DoNotPay spokesperson told Ars that the company "is pleased to have
worked constructively with the FTC to settle this case and fully
resolve these issues, without admitting liability."

"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," DoNotPay's spokesperson said.

The FTC's settlement with DoNotPay is part of a larger agency effort
to crack down on deceptive AI claims. Four other AI companies were
hit with enforcement actions Wednesday, the FTC said, and FTC Chair
Lina Khan confirmed that the agency's so-called "Operation AI Comply"
will continue monitoring companies' attempts to "lure consumers into
bogus schemes" or use AI tools to "turbocharge deception."

"Using AI tools to trick, mislead, or defraud people is illegal,"
Khan said. "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."

DoNotPay never tested robot lawyer

DoNotPay was initially released in 2015 as a free way to contest
parking tickets. Soon after, it quickly expanded its services to
cover 200 areas of law--aiding with everything from breach of contract
claims to restraining orders to insurance claims and divorce
settlements.

As DoNotPay's legal services expanded, the company defended its
innovative approach to replacing lawyers while acknowledging that it
was likely on shaky ground. In 2018, DoNotPay CEO Joshua Browder
confirmed to the ABA Journal that the legal services were provided
with "no lawyer oversight." But he said that he was only "a bit
worried" about threats to sue DoNotPay for unlicensed practice of
law. Because DoNotPay was free, he expected he could avoid some legal
challenges.

According to the FTC complaint, DoNotPay began charging subscribers
$36 every two months in 2019 while making several false claims in ads
to apparently drive up subscriptions.

Page: 1 2 Next -

reader comments

39
 
Ashley Belanger Ashley is a senior policy reporter for Ars Technica,
dedicated to tracking social impacts of emerging policies and new
technologies. She is a Chicago-based journalist with 20 years of
experience.
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