Of note for Ecommerce:
In a second lawsuit, filed under seal in June in New Jersey federal court, the FTC targeted an opportunity scheme that operated under the names Passive Scaling and FBA Machine, which allegedly cost customers around $16 million or more based on deceptive claims of guaranteed income through online storefronts that purportedly used AI-powered software.
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In a third lawsuit, filed in Pennsylvania federal court, the FTC accuses Ecommerce Empire Builders of “falsely claiming to help consumers build an ‘AI-powered Ecommerce Empire’ by participating in its training programs that can cost almost $2,000 or by buying a ‘done for you’ online storefront for tens of thousands of dollars,” the agency said.
As with the other two lawsuits, a judge has put the scheme under the control of a receiver, according to the FTC.
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In a regulatory complaint, the FTC targeted the company Rytr, which offers for sale an AI writing assistant, which among other things generated testimonials and customer reviews.
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The FTC said that the service “generated detailed reviews that contained specific, often material
details that had no relation to the user’s input, and these reviews almost certainly would be false for the users who copied them and published them online.”
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“In many cases, subscribers’ AI-generated reviews featured information that would deceive potential consumers who were using the reviews to make purchasing decisions,” the agency said.
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Rytr has agreed to settle the case through a consent order, which would bar the company from offering or selling services generating consumer reviews or testimonials.
So many potential Sellers believed this would work. I don’t understand how or why, but I hate that they were exploited by grifters and scammers like this. So I’m going to name and shame the trade names in the first 3 of these 4 FTC lawsuits (because the company in the fourth lawsuit, Rytr, was clear that it offered fake AI-generated customer reviews–an obvious no-no):