The FTC announces that is taking action against DoNotPay, a US company that claimed to offer an AI service that was “the world’s first robot lawyer,” but unsurprisingly failed to live up to "its lofty claims that the service could substitute for the expertise of a human lawyer".
According to the FTC’s complaint, DoNotPay promised that its service would allow consumers to “sue for assault without a lawyer” and “generate perfectly valid legal documents in no time,” and that the company would “replace the $200-billion-dollar legal industry with artificial intelligence.” DoNotPay, however, could not deliver on these promises. The complaint alleges that the company did not conduct testing to determine whether its AI chatbot’s 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 website for hundreds of federal and state law violations based solely on the consumer’s email 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. The proposed order also will prohibit the company from making claims about its ability to substitute for any professional service without evidence to back it up.
The FTC states
The DoNotPay Service is an online subscription service targeted to U.S. consumers seeking assistance with a range of commercial issues and legal issues involving American civil law. Respondent used the emergence of new technology like artificial intelligence (AI) as a marketing tool, positioning the DoNotPay Service as a cutting-edge solution for producing legal documents. Respondent described the Service as “the world’s first robot lawyer” and an “AI lawyer” capable of performing legal services such as drafting “ironclad” demand letters, contracts, complaints for small claims court, challenging speeding tickets, and appealing parking tickets. Through a chatbot, subscribers would submit prompts or queries to an AI “robot lawyer” that purportedly operated like a human lawyer, including by applying the relevant laws to subscribers’ particular legal and factual situations; relying on legal expertise and knowledge to avoid potential complications, such as statutes of limitations, compensation limits, and jurisdiction, when generating legal demand letters or initiating cases in small claims court; and detecting legal violations on subscribers’ business websites and providing advice about how to fix them. In fact, the DoNotPay Service was not designed to operate like a human lawyer in these respects.
The DoNotPay Service
5. Respondent has offered a General Membership subscription for the DoNotPay Service since 2019. Although the cost of a General Membership has fluctuated since at least 2020, at times relevant to this Complaint, Respondent charged subscribers $36 every two months.
6. Respondent has offered a Small Business Protection Plan since 2021. Although the cost of the Small Business Protection Plan has fluctuated, at times relevant to this Complaint, Respondent charged subscribers $49.99 per month.
7. The DoNotPay Service has offered features designed to assist subscribers with consumer issues, including obtaining college fee waivers, creating passport photos, changing mailing addresses, claiming rebates, deleting accounts, donating plasma for cash, and finding discounts. At times relevant to this Complaint, the Service also offered features designed to assist subscribers with legal issues, including but not necessarily limited to, breach of contract demand letters, defamation cease-and-desist letters, divorce settlement agreements, restraining orders, insurance claims, releases of liability, revocable living trusts, lawsuits in small claims court, challenging speeding tickets, and appealing parking tickets. ...
DoNotPay did not test whether the Service’s law-related features operated like a human lawyer. DoNotPay has developed the Service based on technologies that included a natural language processing model for recognizing statistical relationships between words, chatbot software for conversing with users, and an Application Programming Interface (“API”) with OpenAI’s ChatGPT. None of the Service’s technologies has been trained on a comprehensive and current corpus of federal and state laws, regulations, and judicial decisions or on the application of those laws to fact patterns. DoNotPay employees have not tested the quality and accuracy of the legal documents and advice generated by most of the Service’s law-related features. DoNotPay has not employed attorneys and has not retained attorneys, let alone attorneys with the relevant legal expertise, to test the quality and accuracy of the Service’s law- related features.
21. DoNotPay subscribers who used the law-related features have complained that the Service did not ask them to submit information relevant to their breach of contract claims, failed to consider important legal issues, and generated legal documents that were not fit for use.
Website Legal Diagnostics Feature
22. DoNotPay has promoted a website diagnostic feature of the Service that purportedly would check a consumer’s small business website for hundreds of federal and state law violations based solely on the consumer’s email address. Compl. Exh. K. This feature purportedly would detect legal violations that, if unaddressed, would potentially cost a consumer $125,000 in legal fees.
DoNotPay’s website diagnostic tool did not, in fact, analyze a consumer’s small business website for hundreds of federal and state law violations based solely on an email address.
