DoNotPay, an AI company best known for helping users cancel unwanted subscriptions and fight parking tickets, has reached a settlement with the FTC over an AI chatbot that was advertised as “the world’s first robot attorney.” The AI advocate did not live up to its claims and DoNotPay did not properly test the chatbot tool, according to the FTC. In fact, the company has reportedly never even hired an actual human lawyer to work on the product.
DoNotPay has agreed to pay $193,000 and will be required to send a notice to any past customers who used the AI agent from 2021 to 2023 warning about the subscription service’s limitations. The settlement would also “prevent a company from making claims about its ability to engage in any professional service without evidence to support that,” according to a statement Wednesday from the FTC.
Attorney AI has billed itself as a tool that can be used for things like suing for assault in small claims court and writing a cease and desist letter. The AI tool also creates legal documents such as NDAs, business contracts, prenuptial agreements, and child custody agreements, according to the FTC. DoNotPay originally planned to use its AI lawyer in a virtual courtroom but canceled that plan in early 2023 after receiving threats from State Bar associations.
The FTC’s complaint, which is available to read online, is full of strange details, including a quote from the DoNotPay website purportedly from the Los Angeles Times: “What this robot attorney can do is remarkably similar—if not more so—to what human attorneys do. .” In fact, this quote was from the Los Angeles Times High School Insider website, a user-generated content platform for high school students, according to the FTC.
The device also wasn’t tested in the way any reasonable person might expect, according to the FTC’s complaint:
DoNotPay employees have not checked the quality and accuracy of the legal documents and advice produced by the many legal aspects of the Service. DoNotPay has never used lawyers and has not retained lawyers, let alone lawyers with relevant legal expertise, to assess the quality and accuracy of the legal aspects of the Service.
The AI company’s founder, Joshua Browder, previously said that DoNotPay wants to, “replace the $200 billion legal industry with artificial intelligence.” Browder dropped out of college in 2018 as part of the Thiel Fellowship, a program started by tech investor Peter Thiel that gives people money to drop out of college and start a business.
On the other hand, DoNotPay was quick to note that the company did not admit any liability in paying the bills with the FTC.
“DoNotPay is pleased to have worked constructively with the FTC to resolve this case and fully resolve these issues, without admitting liability,” the company said in a statement provided by “an unnamed DoNotPay spokeswoman.”
Gizmodo asked about the allegations that it did not hire a lawyer to audit its AI lawyer’s work, but those questions were not answered by the company in its statement. It is not clear whether the statement was generated by AI or written by a human.
“The complaint is related to the use of a few hundred customers some years ago (out of millions of people), and services that have been discontinued for a long time,” the statement continued. “DoNotPay has retained Maneesha Mithal, Former Associate Director at the FTC, as outside counsel, who has been incredibly helpful in handling this matter.”
The news about the move against DoNotPay was part of a broader announcement Wednesday by the FTC focused on ending AI. And FTC chairwoman Lina Khan, a figure adored by progressive Democrats and scorned by many big businesses for her recent enforcement actions, says using AI does not provide any kind of exemption from existing regulations.
“Using AI tools to deceive, mislead or defraud people is illegal,” Khan said in a statement posted on the agency’s website.
“The FTC’s enforcement actions make it clear that there is no exemption for AI from the rules on the books,” Khan continued. “By cracking down on unfair or deceptive practices in these markets, the FTC ensures that honest businesses and innovators can get a fair image and consumers are protected.”
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