Operation AI Comply is a new campaign launched by the FTC to combat five companies that it says are peddling deceptive AI claims' and'schemes'

The Federal Trade Commission seems to be taking action against companies that use the "magic in a box" aspect of AI as a way to promote their often dubious products. Operation AI Comply is a US government consumer protection agency that aims to combat "operations which use AI hype or sell AI technologies that can be used deceptively and unfairly." It has started with five companies it believes have violated consumer protection laws.

DoNotPay is at the top of the list. The FTC claims that this AI legal assistant failed to deliver on its promises, including "suing for assault with an attorney" and "replacing the $200 billion-dollar legal industry by artificial intelligence." The complaint alleges DoNotPay provided a service which it claimed would check for "hundreds" of federal and state laws violations on a small business' website. However, the FTC claims that the service was not effective. It also claims that there was no testing to determine whether the output was equivalent to a human lawyer.

DoNotPay has agreed to a settlement that requires it to pay $193,000 as fines. It will also provide a notice to customers who used the AI features from 2021 to 2023, warning them of limitations of its service.

The FTC also filed a complaint against Ascend Ecom. It describes the company as an "online opportunity scheme" that "defrauded customers of at least 25 million dollars" and promised a five-figure income monthly by the second subscription year.

The list also includes Ecommerce Empire Builders, a name that should send sirens blaring and a bucket of ice water over your head, Rytr, a writing assistant AI that allegedly writes deceitful reviews, and FBA Machine "a business opportunity that falsely promised consumers they would earn guaranteed income by using online storefronts powered by AI-powered software."

FTC Chair Lina M. Khan stated: "The FTC’s enforcement actions make it clear that AI is not exempt from the laws in place." FTC ensures that honest businesses, innovators and consumers are protected by cracking down on unfair and deceptive practices.

Well, good. While many companies have been happy with adding AI features to their products and services in order to ride the AI hype, they are still required to be honest with consumers about what AI can achieve. The FTC is focusing on some of the most egregious examples.

There are legitimate uses of AI in the real world that could be beneficial. Snake-oil sellers will always try to cash in on the latest trend to make quick money. We can only hope, that through continued action, they are held accountable for their ill-gotten gain.