Washington — The artificial intelligence startup DoNotPay, self-proclaimed as the world’s first “robot lawyer,” has recently settled for $193,000 with the Federal Trade Commission (FTC) over accusations of misleading marketing claims. The FTC criticized the company for promoting its AI chatbot’s capabilities as on par with human lawyers without any supportive evidence or proper testing.
DoNotPay, initially lauded for its innovative approach to offering legal advice on various matters including parking ticket disputes and divorce settlements, did not admit liability but agreed to the settlement following charges of violating the FTC Act. The company is also required to inform users who subscribed between 2021 and 2023 about the limitations of its legal services.
The FTC’s action against DoNotPay is part of a broader initiative titled “Operation AI Comply,” aimed at addressing deceptive claims made by AI companies. FTC Chair Lina Khan emphasized the importance of this initiative, stating, “Using AI tools to trick, mislead, or defraud people is illegal. The FTC’s enforcement actions make clear that there is no AI exemption from the laws on the books.”
DoNotPay originated in 2015 as a free service to help individuals contest parking tickets. Quickly expanding, it claimed to cover over 200 areas of law including insurance claims and restraining orders. By 2019, DoNotPay began charging a subscription fee and made several bold advertising claims to attract users, leading to the scrutiny under which they found are now positioned.
In light of the settlement, DoNotPay is prohibited from making unsubstantiated claims about its services replacing professional legal advice. A spokesperson for DoNotPay stated that the company had worked constructively with the FTC and was pleased to resolve these issues fully. Highlighting the scope of the complaint, the spokesperson mentioned it concerned “only a few hundred customers” from the millions of people who used the service, involving features that had already been discontinued.
FTC’s recent crackdown included actions against four other AI companies, not just DoNotPay. This marks a significant step as government bodies like the FTC increase their oversight of AI and technology companies, especially those whose operations directly affect consumers by offering professional advice without proper credentials or oversight.
Khan further reinforced the FTC’s commitment to these efforts by affirming, “By cracking down on unfair or deceptive practices in these markets, [the] FTC is ensuring that honest businesses and innovators can get a fair shot and consumers are being protected.”
The actions taken against DoNotPay and others signal a growing intent to ensure transparency and accountability in the rapidly advancing AI industry, setting a precedent that could shape the practices of AI-centered startups and tech companies moving forward. As AI technology continues to evolve, the legal and ethical implications of its applications remain an area of critical importance, with regulatory bodies showing increased willingness to intervene when necessary.