Recognize official government websites by the ". gov" extension. Federal government and military websites typically end in ". gov" or ". mil". Prior to sharing sensitive information, ensure that you are on an official federal government site. These sites are secure, indicated by the "https://" at the beginning of the URL, which guarantees encrypted and secure transmission of information. Learn more about consumer rights, identifying and avoiding scams, and access resources to understand the impact of consumer protection laws on your business. Our objective is to protect consumers and maintain fair competition by preventing deceptive, anti-competitive, and unfair business practices through law enforcement, advocacy, and education, while minimizing interference with legitimate business activities. We anticipate that "artificial intelligence" will be the 2023 Phrase of the Year even with several months remaining. However, some marketers are using this term to hide their deceptive practices, similar to a discounted utensil packaged in a pale blue gift box. The Federal Trade Commission (FTC) has filed a lawsuit against defendants Automators AI (formerly known as Empire Ecommerce and Onyx Distribution), Roman Cresto, John Cresto, and Andrew Chapman, alleging violations of the Business Opportunity Rule and the FTC Act. The defendants have been accused of making misleading earnings claims, disguising them with trendy terminology. The defendants have also been charged with using illegal contract clauses to suppress customer complaints, which violates the Consumer Review Fairness Act. According to the FTC, the defendants, through their companies, have presented themselves as experts in ecommerce and self-made millionaires who have helped numerous consumers earn significant profits from running third-party stores on platforms like Amazon, Walmart, and Facebook. Through various means such as websites, videos, emails, and social media, the defendants have made unrealistic claims about potential earnings, such as "$4k-$6k consistently monthly net profit" and "597k in 8 months. " The FTC alleges that the defendants have falsely attributed these claims to their use of artificial intelligence, stating that their company "integrates AI machine learning into the automation process, resulting in increased revenue and margins. " Testimonials from satisfied customers have also been used to entice people. The defendants offered consumers "automated packages" with an initial investment ranging from $10, 000 to $125, 000, claiming that the managed stores delivered monthly profit margins between 8% and 20%.

The FTC asserts that most of the stores managed by the defendants were either inactive or suspended for policy violations. Attempts to open Walmart. com stores were largely unsuccessful. The FTC claims that the defendants were aware of customer dissatisfaction, as they received numerous complaints about the underperformance of their stores. Instead of providing refunds, the defendants often offered alternative ecommerce stores in different marketplaces while requiring customers to sign agreements containing clauses that threatened legal action if customers spoke negatively about the defendants. As a result of their dealings with the defendants, many consumers have experienced significant financial losses. The FTC has charged the defendants with violating Section 5 and the Business Opportunity Rule by making income or profit misrepresentations, failing to provide required disclosure documents, making unsubstantiated earnings claims, and failing to include necessary information in their advertisements. The FTC also claims that the defendants' form contracts infringe upon consumers' rights to express honest opinions under the Consumer Review Fairness Act. A federal court in California has temporarily suspended the operations of Automators AI. This case serves as a valuable reminder for other companies. Conduct a thorough compliance check to ensure adherence to the Business Opportunity Rule. Substantiate all claims related to earnings, profits, or financial benefits with adequate evidence. Review and remove any provisions in form contracts that violate the Consumer Review Fairness Act, safeguarding the rights of consumers to share their honest opinions. For more guidance on compliance, refer to the Consumer Review Fairness Act: What Businesses Need to Know, provided by the FTC.