FTC accuses AI search engine of 'rampant consumer deception'

"There's just one problem, according to a lawsuit filed by the Federal Trade Commission on Tuesday: the company's offerings are allegedly a ploy to lock consumers into recurring charges they don't want, a scheme that ensnared hundreds of thousands of people and that federal regulators are calling "rampant consumer deception." Here's how federal investigators say it worked. Someone browsing the web clicks on an ad related to their online search and arrives on one of a host of landing pages the company operates."

"Some of the domains include JustAnswer.com, AskWomensHealth.com, AskALawyer.com, Pearl.com and hundreds of others. Then an assistant chatbot, known as Pearl, asks further questions about the search before sending the user a form to join the company's question-and-answer service for either $1 or $5. Once credit card information is handed over, the company starts milking consumers, according to the federal complaint."

"The unwanted monthly fees, which can be as high as $79, continue every month until consumers cancel something that is revealed in fine print above a large orange button that says: "Confirm now." According to federal investigators, this process duped hundreds of thousands of consumers, which the suit says led to a flood of complaints describing the company's "scammy" behavior. The company's CEO Andy Kurtzig was aware of the consumer deception and refused to make any changes, according to the suit."

Federal regulators say Pearl and JustAnswer used targeted ads and dozens of landing domains to funnel users into a chatbot interaction that asks follow-up questions. The chatbot then presents a sign-up form offering a $1 or $5 join fee while masking an immediate higher monthly subscription charge, sometimes up to $79. Consumers were charged the join fee and the recurring subscription at sign-up and continued to receive unwanted monthly charges until they cancelled, with the subscription disclosure buried in fine print. The FTC alleges hundreds of thousands of consumers were deceived and that company leadership knew and declined to change practices.

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