What Happened
The FTC charged that DoNotPay marketed its AI service as a 'robot lawyer' that could sue for assault without a lawyer and generate 'perfectly valid' legal documents, without ever testing whether its outputs matched the quality of a human attorney and without retaining lawyers to check them. Subscribers relied on unvetted AI-generated legal advice and documents. The company settled the FTC's complaint in September 2024.
Impact
DoNotPay agreed to pay $193,000, notify 2021-2023 subscribers of the service's limitations, and stop claiming lawyer-equivalent performance without evidence. The action, part of the FTC's Operation AI Comply, signaled that unproven AI-capability claims are treated as deceptive advertising.
Cost: $193,000 settlement
How to Prevent This
- Substantiate every AI-capability marketing claim with documented testing before publishing it
- Have licensed domain professionals evaluate outputs in regulated fields like law and medicine
- Disclose clearly that AI output is not professional advice and state known error modes
- Keep marketing, legal, and engineering review aligned so claims track actual system performance
- Monitor real user outcomes and correct or refund when the product falls short of claims