DoNotPay, the company that touted itself as the creator of the “world’s first robot lawyer,” has settled with the Federal Trade Commission (FTC) for $193,000. This settlement is part of the FTC’s broader initiative, dubbed Operation AI Comply, which seeks to hold companies accountable for using artificial intelligence (AI) to mislead consumers.
Misleading Promises and Lack of Testing
The FTC’s complaint against DoNotPay highlighted several deceptive claims regarding its AI capabilities. The company asserted that its technology could revolutionize the $200 billion legal industry and perform tasks traditionally reserved for human lawyers, such as drafting legal documents. However, the FTC found that these assertions lacked any scientific backing or thorough testing.
According to the complaint, DoNotPay’s AI systems were not properly trained on federal or state laws, nor had the company consulted qualified attorneys to verify the quality of its legal advice and documents. This oversight severely undermined the company’s claims, as the FTC noted, “DoNotPay has not employed attorneys and has not retained attorneys with the relevant legal expertise to test the quality and accuracy of the Service’s law-related features.”
DoNotPay also faced scrutiny for its marketing strategies. In one notable instance, the company featured a quote supposedly from the *Los Angeles Times*, claiming that its AI’s capabilities closely mirrored those of human lawyers. The FTC discovered, however, that this quote originated from a high school student’s opinion piece on the *Los Angeles Times’ High School Insider* platform—a far cry from a reputable news source.
In practice, DoNotPay’s services relied heavily on a chatbot powered by OpenAI’s ChatGPT. While the chatbot could process language, it did not possess the legal expertise necessary to provide reliable advice. The FTC pointed out that DoNotPay misleadingly claimed its AI could assist users in suing for assault without human involvement and even claimed it could identify legal violations on small business websites just from an email address. DoNotPay’s assertions that these services could save businesses significant legal fees were also deemed ineffective by the FTC.
Settlement Terms and Restrictions
Under the terms of the settlement, DoNotPay must pay $193,000 and notify previous users of its AI services between 2021 and 2023 about the service’s limitations. Furthermore, the company is barred from making future claims regarding its AI’s capability to replace professional legal services unless it can substantiate such claims with valid evidence.
This settlement marks a pivotal moment in the FTC’s ongoing efforts to regulate misleading AI-driven services. The agency made it clear that companies cannot position AI products as substitutes for professional expertise without rigorous testing and verification.
DoNotPay had initially envisioned deploying its AI in actual courtrooms but abandoned this plan in early 2023 after facing threats from various State Bar associations. The AI tool was marketed for several applications, including drafting cease-and-desist letters and creating legal documents like non-disclosure agreements and prenuptial contracts.
In response to the FTC’s actions, DoNotPay emphasized that it did not admit to any wrongdoing in the settlement. A spokesperson for the company stated, “DoNotPay is pleased to have worked constructively with the FTC to settle this case and fully resolve these issues, without admitting liability.” The company further asserted that the complaint involved a small number of users from outdated services and highlighted its cooperation with the FTC throughout the process.
Wider Implications for AI Misuse
DoNotPay’s case is part of a larger crackdown by the FTC on businesses that exploit AI technologies to deceive consumers. FTC Chair Lina Khan reiterated that using AI as a guise for misleading practices is unlawful. The FTC has also targeted other companies, such as Rytr, for facilitating the creation of fake reviews and filed lawsuits against businesses like Ascend Ecom for fraudulent claims involving AI-generated revenue streams.
