Fraudsters are using the hype of new technology, specifically artificial intelligence (AI), to commit fraud on consumers. The same bad guys are just spinning buzzwords to develop new schemes to take advantage of consumers.

This week, the Federal Trade Commission (FTC) announced that it took enforcement action against five companies “that use AI hype or sell AI technology that can be used in deceptive and unfair ways” through its enforcement sweep called Operation AI Comply.

The facts detailed in the FTC’s complaints against the companies reveal  how fraudsters are taking advantage of consumers with promises of making big money that can’t be met and, in some cases, defrauding consumers out of millions of dollars. Reading the complaints and understanding how these schemes work is an effective way to prevent becoming a victim of a similar fraud. The message behind the enforcement actions is to stay alert of promises that are too good to be true. This is an old message, but fraudsters are using AI’s hype and promise to catch consumers flat-footed. Stay alert about claims of big money through the use of AI, especially if you are required to pay any money upfront to reap the benefits.

Photo of Linn Foster Freedman Linn Foster Freedman

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She is a member of the Business Litigation Group and the Financial Services Cyber-Compliance Team, and chairs the firm’s Data Privacy and Security and Artificial Intelligence Teams. Linn focuses her…

Linn Freedman practices in data privacy and security law, cybersecurity, and complex litigation. She is a member of the Business Litigation Group and the Financial Services Cyber-Compliance Team, and chairs the firm’s Data Privacy and Security and Artificial Intelligence Teams. Linn focuses her practice on compliance with all state and federal privacy and security laws and regulations. She counsels a range of public and private clients from industries such as construction, education, health care, insurance, manufacturing, real estate, utilities and critical infrastructure, marine and charitable organizations, on state and federal data privacy and security investigations, as well as emergency data breach response and mitigation. Linn is an Adjunct Professor of the Practice of Cybersecurity at Brown University and an Adjunct Professor of Law at Roger Williams University School of Law.  Prior to joining the firm, Linn served as assistant attorney general and deputy chief of the Civil Division of the Attorney General’s Office for the State of Rhode Island. She earned her J.D. from Loyola University School of Law and her B.A., with honors, in American Studies from Newcomb College of Tulane University. She is admitted to practice law in Massachusetts and Rhode Island. Read her full rc.com bio here.