FTC sues Automators for misleading "AI" online sales and coaching fraud

The US Federal Trade Commission (FTC) sued Automators LLC for luring consumers into investing USD 22 million in online stores supposedly powered by AI. Automators LLC had promised customers high returns on investment in online stores on Amazon.com and Walmart.com, claiming to use AI and machine learning to ensure success and profitability. The company also offered to teach consumers how to successfully set up and manage e-stores themselves using a 'proven system' and the powers of artificial intelligence. However, the 'vast majority' of Automators' clients did not make the promised earnings or recoup their investment, instead losing significant capital. Amazon and Walmart subsequently suspended Automators' stores, and a temporary injunction issued by a Southern California federal court suspended the company’s operations. The Automators’ case was the first brought by the FTC relating to AI scams and was seen to serve as a warning to other companies using AI for fraudulent business practices. The FTC published a warning about misleading AI marketing i n February 2023 . System 🤖 Automators AI 🔗 Op erator: Automators LL C Developer: Automators LLC Country: USA Sector: Business/professional services Purpose: Recommend products Technology: Machine learning Issue: Transparency Regulation ⚖️ Federal Trade Commission Act Disclosure Requirements and Prohibitions Concerning Business Opportunities Consumer Review Fairness Act of 2016 US Federal Trade Commission (2023). Keep your AI claims in check Legal, regulatory 👩🏼‍⚖️ FTC v Automators LLC

Date it happened

2023-08-01

Organisation involved

Automators LLC

This is a record of what was reported, not a finding that anyone broke the law. If it names your organisation and you believe it is wrong, the corrections process is free and open to everyone.