*The US Federal Trade Commission is currently taking action against multiple companies and technology innovators introducing online business opportunity schemes that have relied on Artificial Intelligence to supercharge deceptive or unfair conduct that harms consumers in the new tech space

Gbenga Kayode | 绿帽献妻

As some companies offer fake reviews, bogus legal services, and deceptive online storefront deals in this era of Artificial Intelligence (AI), regulatory authorities are becoming more concerned about the safety of consumers, and accordingly, are fast closing in on certain cyberfraudsters in the new technology ecosystem.

The United States (US) Federal Trade Commission, for instance, is trying to get out in front of the trend, taking action against multiple companies that have relied on AI to supercharge deceptive or unfair conduct that harms consumers in the American country.

绿帽献妻 gathered that in a type of scam uses Artificial Intelligence technology, scammers can impersonate your family and friends using AI technology to ask you for money or personal information.

They do this by manipulating videos and recordings found on social media to produce realistic sounding voice recordings or even videos, agency report said.

Artificial Intelligence promises ring hollow then used to entice consumers to spend money on schemes that don’t work and products that aren’t legal.

It is also noted that just about anything else, Artificial Intelligence can either be used for good or evil.

And human nature being what it is, there are plenty of early adopters out there thinking up new ways to use AI to scam, deceive and rip off consumers, report said.

As the regulatory Commission moves to take action against multiple companies that have relied on AI to amplify deceptive or unfair conduct that harms consumers, there are cases being announced to include actions against a company promoting an AI tool that enabled its customers to create fake reviews.

Other include a company claiming to sell 鈥淎I Lawyer鈥� services, and multiple companies requesting that they could use AI to help consumers make money through online storefronts.

FTC Chairman: Using AI tools to trick, mislead, or defraud consumers is illegal

Reacting to the unfair or deceptive trend in the AI ecosystem, Lina M. Khan, Chairman of the Federal Trade Commission, averred: 鈥淯sing AI tools to trick, mislead, or defraud people is illegal.

鈥淭he FTC鈥檚 enforcement actions make clear that there is no AI exemption from the laws on the books.

鈥淏y 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.鈥�

The cases included in this sweep show that firms have seized on the hype surrounding AI and are using it to lure consumers into bogus schemes, and are also providing AI powered tools that can turbocharge deception.

Regulatory Commission spotlights 鈥榙eceptive鈥� online business opportunity schemes 聽聽聽

Among others, the Federal Trade Commission is taking action against DoNotPay, a company that claimed to offer an AI service that was 鈥渢he world鈥檚 first robot lawyer,鈥� but the product failed to live up to its lofty claims that the service could substitute for the expertise of a human lawyer, agency report said.

According to the FTC鈥檚 complaint, DoNotPay promised that its service would allow consumers to 鈥渟ue for assault without a lawyer鈥� and 鈥済enerate perfectly valid legal documents in no time,鈥� and that the company would 鈥渞eplace the $200-billion-dollar legal industry with Artificial Intelligence.鈥�

DoNotPay, however, could not deliver on these promises. The complaint alleges that the company did not conduct testing to determine whether its AI chatbot鈥檚 output was equal to the level of a human lawyer, and that the company itself did not hire or retain any attorneys.

The complaint also alleges that DoNotPay offered a service that would check a small business Web site for hundreds of federal and state law violations based solely on the consumer鈥檚 e-mail address.

This feature purportedly would detect legal violations that, if unaddressed, would potentially cost a small business $125,000 in legal fees, but according to the complaint, this service was also not effective.

DoNotPay has agreed to a proposed Commission order settling the charges against it. The settlement would require it to pay $193,000, provide a notice to consumers who subscribed to the service between 2021 and 2023 warning them about the limitations of law-related features on the service.

Ascend Ecom

The FTC has filed a lawsuit against an online business opportunity scheme that it alleges has falsely claimed its 鈥渃utting edge鈥� AI-powered tools would help consumers quickly earn thousands of dollars a month in passive income by opening online storefronts. According to the complaint, the scheme has defrauded consumers of at least $25 million.

The scheme is run by William Basta and Kenneth Leung, and it has operated under a number of different names since 2021, including Ascend Ecom, Ascend Ecommerce, Ascend CapVentures, ACV Partners, ACV, Accelerated eCom Ventures, Ethix Capital by Ascend, and ACV Nexus.

According to the FTC鈥檚 complaint, the operators of the scheme charge consumers tens of thousands of dollars to start online stores on ecommerce platforms such as Amazon, Walmart, Etsy, and TikTok, while also requiring them to spend tens of thousands more on inventory.

Ascend鈥檚 advertising content claimed the company was a leader in ecommerce, using proprietary software and artificial intelligence to maximize clients鈥� business success.

The complaint notes that, while Ascend promises consumers it will create stores producing five-figure monthly income by the second year, for nearly all consumers, the promised gains never materialize, and consumers are left with depleted bank accounts and hefty credit card bills.

The complaint alleges that Ascend received numerous complaints from consumers, pressured consumers to modify or delete negative reviews of Ascend, frequently failed to honor their 鈥済uaranteed buyback,鈥� and unlawfully threatened to withhold the supposed 鈥済uaranteed buyback鈥� for those who left negative reviews of the company online.

As a result of the FTC鈥檚 complaint, a federal court issued an order temporarily halting the scheme and putting it under the control of a receiver. The FTC鈥檚 case against the scheme is ongoing and will be decided by a federal court, according to report.

Ecommerce Empire Builders

The FTC has charged a business opportunity scheme with falsely claiming to help consumers build an 鈥淎I-powered Ecommerce Empire鈥� by participating in its training programmes that can cost almost $2,000 or by buying a 鈥渄one for you鈥� online storefront for tens of thousands of dollars.

The scheme, known as Ecommerce Empire Builders (EEB), claims consumers can potentially make millions of dollars, but the FTC鈥檚 complaint alleges that those profits fail to materialize.

The complaint alleges that EEB鈥檚 CEO, Peter Prusinowski, has used consumers鈥� money 鈥� as much as $35,000 from consumers who purchase stores 鈥� to enrich himself while failing to deliver on the scheme鈥檚 promises of big income by selling goods online.

In its marketing, EEB encourages consumers to 鈥淪kip the guesswork and start a million-dollar business today鈥� by harnessing the 鈥減ower of artificial intelligence鈥� and the scheme鈥檚 supposed strategies.

As a result of the FTC鈥檚 complaint, a federal court issued an order temporarily halting the scheme and putting it under the control of a receiver. The FTC鈥檚 case against the scheme is ongoing and will be decided by a federal court, according to report.

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