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Consumer Daily Reports

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Companies offer fake reviews, bogus legal services, deceptive online storefront deals

By Truman Lewis Consumer News: Feds target companies that use artificial intelligence to swindle consumers of ConsumerAffairs
September 25, 2024

Like just about anything else, artificial intelligence can be used for good or evil. And human nature being what it is, there are plenty of early adopters out there thinking up new ways to use AI to scam, deceive and rip off consumers.

The Federal Trade Commission is trying to get out in front of the trend, taking action against multiple companies that have relied on AI to supercharge deceptive or unfair conduct that harms consumers.

The cases being announced today include actions against a company promoting an AI tool that enabled its customers to create fake reviews, a company claiming to sell AI Lawyer services, and multiple companies claiming that they could use AI to help consumers make money through online storefronts.

Using AI tools to trick, mislead, or defraud people is illegal, said FTC Chair Lina M. Khan. The FTCs enforcement actions make clear that there is no AI exemption from the laws on the books. By cracking down on unfair or deceptive practices in these markets, FTC is ensuring that honest businesses and innovators can get a fair shot and consumers are being protected.

The cases included in this sweep show that firms have seized on the hype surrounding AI and are using it to lure consumers into bogus schemes, and are also providing AI powered tools that can turbocharge deception.

DoNotPay

The FTC is taking action against DoNotPay, a company that claimed to offer an AI service that was the worlds first robot lawyer, but the product failed to live up to its lofty claims that the service could substitute for the expertise of a human lawyer.

According to the FTCs 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 chatbots 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 consumers 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.

Ascend Ecom

The FTC has filed a lawsuit against an online business opportunity scheme that it alleges has falsely claimed its cutting edge AI-powered tools would help consumers quickly earn thousands of dollars a month in passive income by opening online storefronts. According to the complaint, the scheme has defrauded consumers of at least $25 million.

The scheme is run by William Basta and Kenneth Leung, and it has operated under a number of different names since 2021, including Ascend Ecom, Ascend Ecommerce, Ascend CapVentures, ACV Partners, ACV, Accelerated eCom Ventures, Ethix Capital by Ascend, and ACV Nexus.

According to the FTCs complaint, the operators of the scheme charge consumers tens of thousands of dollars to start online stores on ecommerce platforms such as Amazon, Walmart, Etsy, and TikTok, while also requiring them to spend tens of thousands more on inventory. Ascends advertising content claimed the company was a leader in ecommerce, using proprietary software and artificial intelligence to maximize clients business success.

The complaint notes that, while Ascend promises consumers it will create stores producing five-figure monthly income by the second year, for nearly all consumers, the promised gains never materialize, and consumers are left with depleted bank accounts and hefty credit card bills.

The complaint alleges that Ascend received numerous complaints from consumers, pressured consumers to modify or delete negative reviews of Ascend, frequently failed to honor their guaranteed buyback, and unlawfully threatened to withhold the supposed guaranteed buyback for those who left negative reviews of the company online.

As a result of the FTCs complaint, a federal court issued an order temporarily halting the scheme and putting it under the control of a receiver. The FTCs case against the scheme is ongoing and will be decided by a federal court.

Ecommerce Empire Builders

The FTC has charged a business opportunity scheme with 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 scheme, known as Ecommerce Empire Builders (EEB), claims consumers can potentially make millions of dollars, but the FTCs complaint alleges that those profits fail to materialize.

The complaint alleges that EEBs CEO, Peter Prusinowski, has used consumers money as much as $35,000 from consumers who purchase stores to enrich himself while failing to deliver on the schemes promises of big income by selling goods online.

In its marketing, EEB encourages consumers to Skip the guesswork and start a million-dollar business today by harnessing the power of artificial intelligence and the schemes supposed strategies.

As a result of the FTCs complaint, a federal court issued an order temporarily halting the scheme and putting it under the control of a receiver. The FTCs case against the scheme is ongoing and will be decided by a federal court.

Rytr

Since April 2021, Rytr has marketed and sold an AI writing assistant service for a number of uses, one of which was specifically Testimonial & Review generation. Paid subscribers could generate an unlimited number of detailed consumer reviews based on very limited and generic input.

According to the FTCs complaint, Rytrs service generated detailed reviews that contained specific, often material details that had no relation to the users input, and these reviews almost certainly would be false for the users who copied them and published them online.

In many cases, subscribers AI-generated reviews featured information that would deceive potential consumers who were using the reviews to make purchasing decisions. The complaint further alleges that at least some of Rytrs subscribers used the service to produce hundreds, and in some cases tens of thousands, of reviews potentially containing false information.

The proposed order settling the Commissions complaint is designed to prevent Rytr from engaging in similar illegal conduct in the future. It would bar the company from advertising, promoting, marketing, or selling any service dedicated to or promoted as generating consumer reviews or testimonials.

FBA Machine

In June, the FTC took action against a business opportunity scheme that allegedly falsely promised consumers that they would make guaranteed income through online storefronts that utilized AI-powered software.

According to the FTC, the scheme, which has operated under the names Passive Scaling and FBA Machine, cost consumers more than $15.9 million based on deceptive earnings claims that rarely, if ever, materialize.

The complaint alleges that Bratislav Rozenfeld (also known as Steven Rozenfeld and Steven Rozen) has operated the scheme since 2021, initially as Passive Scaling. When Passive Scaling failed to live up to its promises and consumers sought refunds and brought lawsuits, Rozenfeld rebranded the scheme as FBA Machine in 2023.

The rebranded marketing materials claim that FBA Machine uses AI-powered tools to help price products in the stores and maximize profits.

The schemes claims were wide-ranging, promising consumers that they could operate a 7-figure business and citing supposed testimonials from clients who generate over $100,000 per month in profit. Company sales agents told consumers that the business was risk-free and falsely guaranteed refunds to consumers who did not make back their initial investments, which ranged from tens of thousands to hundreds of thousands of dollars.

As a result of the FTCs complaint, a federal court issued an order temporarily halting the scheme and putting it under the control of a receiver. The case against the scheme is still under way and will be decided by a federal court.



Photo Credit: Consumer Affairs News Department Images


Posted: 2024-09-25 15:59:42

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Consumer News: Nearly half of U.S. homeowners hit with insurance rate hikes

Tue, 16 Sep 2025 22:07:07 +0000

It's the highest average increase in more than a decade

By James R. Hood of ConsumerAffairs
September 16, 2025

  • J.D. Power study finds 47% of homeowners saw premium increases in past year, highest in over a decade

  • High-value customers most likely to leave insurers after repeated price hikes

  • Clear communication and options can ease dissatisfaction, study shows


Premium hikes drive customer defection

Almost half of U.S. homeowners insurance customers (47%) experienced a premium increase in the past year, the highest rate of insurer-initiated hikes in more than 10 years, according to the J.D. Power 2025 U.S. Home Insurance Study released Wednesday.

The trend is hitting the most profitable segment of the market especially hard. Among high-value customersthose with multiple policies and higher premiums49% reported a rate increase. These customers are significantly more likely to switch insurers after repeated hikes, threatening long-term revenue streams for carriers.

In a year marked by inflation, severe weather and tightening reinsurance markets, home insurance premiums have risen sharply in many parts of the country, said Craig Martin, executive director of global insurance intelligence at J.D. Power. While these increases often reflect real cost pressures, theyre also eroding trust and driving customers to shop for alternatives.

Trust and loyalty eroding

The study found that 43% of customers who had a rate increase and do not plan to renew cited the price hike as their reason for switching. Trust levels also decline among those facing insurer-initiated increases, with customers reporting that carriers become harder to work with.

For high-value customers unlikely to renew, 45% cited repeated rate increases as the main driver of defection. Among low-value customers, the figure was just 30%.

Communication makes a difference

Insurers can mitigate the negative effects of premium hikes by proactively explaining the reasons behind increases and offering options to reduce costs, the study found. When customers fully understood the rationale and had choices, overall satisfaction averaged 721 out of 1,000higher than customers who had no increase at all.

Amica ranked highest in the homeowners insurance segment with a score of 705, followed by Chubb (677) and Erie Insurance (676). In the renters insurance category, Amica also ranked first (711), ahead of Erie Insurance (705) and CSAA Insurance Group (689).

The 2025 study was based on responses from 14,511 homeowners and renters gathered between July 2024 and May 2025.


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Consumer News: Appeals court OKs firing hundreds of CFPB employees

Tue, 16 Sep 2025 22:07:07 +0000

The decision could be overturned by the full court which can review a three-judge panel's ruling

By Truman Lewis of ConsumerAffairs
September 16, 2025

A federal appeals court hasvacateda U.S. District Court decision that halted mass firings at the Consumer Financial Protection Bureau (CFPB). In a 2-1decision, a three-judge panel at the U.S. Court of Appeals for the D.C. Circuit remanded the case for further proceedings. The panel stayed its decision to allow for a petition for re-hearing by the full court, holding that the firings cannot proceed until one week after the results of the petition, which could result in further delay and potentially reverse the decision.

Todays decision is a deeply disturbing development in the ongoing campaign to shutter the CFPB, which has defended people from unscrupulous practices by credit reporting companies, Wall Street banks, and big corporations, saidLauren Saunders, director of federal advocacy at the National Consumer Law Center.

The CFPB was created after millions of people lost their jobs and homes in the Great Recession and has helped return $21 billion to 200 million consumers harmed by companies that violated the law, saidSaunders.People need the CFPB to prevent financial companies from running roughshod over families, Veterans, and older adults.

In her dissent, Judge Pillard wrote: Congress created the CFPB, assigned it important missions and powers, and subjected its decisions to the strong presumption of judicial review that applies as a matter of course to the final actions of federal agencies. It is untenable to hold that same Congress meant the agencys continued existence to be a matter of unilateral and unexplained presidential edict.

The courts decision is the latest development in alawsuit filed in Januaryby the National Treasury Employees Union (NTEU), NCLC, National Association for the Advancement of Colored People (NAACP), Virginia Poverty Law Center, CFPB Employee Association, and Pastor Eva Steege, against the CFPB and CFPB Acting Director Russell Vought, to challenge the unlawful dismantling of the CFPB. (Ms. Steege, 83, had reached out to the CFPB to help her receive loan forgiveness to pay down her student loan debt. She passed away in April, and her husband, Ted Steege, replaced her as plaintiff in the case.)


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Consumer News: Target Circle Week returns October 5-11

Tue, 16 Sep 2025 22:07:07 +0000

The retailer is also preparing consumers for holiday shopping with gifts starting at $5

By Kristen Dalli of ConsumerAffairs
September 16, 2025

  • Target is rolling out 20,000 new holiday items this season thats roughly double last years number.

  • Thousands of gifts starting at just $5, with many items under $20.

  • The big sale kicks off October 511, 2025, featuring deals on gifts, fall styles, and essentials. VIP access starts Oct. 4 for Target Circle 360 members.


Targets upping its holiday game in 2025 with a massive new assortment.

There are 20,000 new items many of them exclusive to Target spanning holiday dcor, fashion, toys, beauty, and more.

On top of that, prices are designed to hit a sweet spot for gift-givers on a budget: thousands of items begin at just $5 and most stay under $20. Even beauty products will have some deals starting as low as $3.

Theyre also expanding faster delivery, to make it easier to get purchases when you need them.

"With our unmatched combination of great products and great prices, Target is making it possible for everyone to celebrate the holidays on a budget," Rick Gomez, executive vice president and chief commercial officer, Target, said in a news release.

Target Circle Week: Your key savings window

Circle Week is Targets weeklong shopping event thats timed like an early holiday kickoff. Heres what to mark on your calendar and how to make the most of it:

What

When

Who Gets Early Access

Target Circle Week deals

Oct. 511, 2025

All Target Circle members (free membership)

Early access

Oct. 4

Circle 360 members (paid upgrade)

During Circle Week, expect big markdowns on fall staples, holiday gifts, and everyday essentials youll use anyhow. As always with Target, many of the deals are exclusive or early-bird.

Big holiday deals youll want to snag

Here are some of the most exciting items and categories shoppers should keep an eye on many with exclusive drops and great price points:

  • Pop Culture & Exclusive Collections. Target is partnering again with hit franchises like Stranger Things and Wicked: For Good. Expect exclusive items across many categories: apparel, home dcor, toys, collectibles, drinkware, themed fashion.

  • Beauty Gifts Starting Very Low. Around 60% of Targets beauty gifting assortment will be exclusive to Target, and some beauty items will start as low as $3. Think lip charms, fragrance sets, grooming kits small gift items with high style value.

  • Home & Decor Under Budget. From faux-fur blankets and cozy, cashmere-like sweaters to seasonal ornaments, pillows, festive tableware, etc. Many dcor items will follow that same trend: exclusive designs, holiday-themed pieces, and price tags that stay comfortably under $20.

  • Toys & Tech for Less. Expect lots of holiday toy drops, including both classics (LEGO, Barbie, Paw Patrol) and trendier items. Tech and wellness gifts (think small gadgets, personal care) will be more affordable and accessible.

  • Food & Gifting Extras. Target is offering expanded assortments of treats festive foods, ready-to-bake items, snacks, and sweet gifts for hosting. These are great add-ons or smaller gifts, especially for neighbors, co-workers, etc.

  • Deal of the Day & Weekly Deals After Nov. 1. If you miss something during Circle Week, dont worry starting November 1, Target is planning hundreds of weekly deals, including its Deal of the Day feature that includes savings up to 50% off on select items.


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Consumer News: U.S. investigates Tesla Model Y door handle failures

Tue, 16 Sep 2025 22:07:07 +0000

The probe could lead to a recall if a serious safety risk is found

By Truman Lewis of ConsumerAffairs
September 16, 2025
  • NHTSA opens probe into 174,000 Tesla Model Y vehicles from 2021 model year
  • Parents report being locked out of cars with children inside, some breaking windows to gain entry

  • Investigation could lead to recall if defect is deemed a safety risk

Federal safety agency opens probe

The U.S. National Highway Traffic Safety Administration (NHTSA) has launched an investigation into about 174,000 Tesla Model Y vehicles from the 2021 model year after reports that their electronic door handles can become inoperative.

The probe follows nine complaints involving parents who were unable to open exterior doors after placing children inside the vehicle. In four cases, parents broke windows to regain access.

Safety risks for children

NHTSA noted that while Tesla vehicles are equipped with manual door releases inside, children may not be able to reach or operate them. The agency said the failures appear linked to insufficient voltage supplied to the electronic locks.

Some repair invoices cited replacement of the low-voltage battery after the incidents, but owners reported no warning signs before the door handles stopped functioning.

Possible recall ahead

Tesla did not immediately respond to a request for comment. NHTSAs preliminary evaluation is the first step toward a potential recall if regulators determine the malfunction poses an unreasonable safety risk.

The case adds to a series of federal safety investigations involving Tesla vehicles, with regulators focusing on both software and hardware issues as the automaker expands its U.S. fleet.


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Consumer News: Mark your calendars: Amazon Prime Big Deal Days is October 7-8

Tue, 16 Sep 2025 22:07:07 +0000

Shoppers can start saving today ahead of the sales event

By Kristen Dalli of ConsumerAffairs
September 16, 2025

  • Amazons Prime Big Deal Days is officially returning October 7-8.

  • The retailer has several ways for shoppers to start saving now three weeks ahead of the sales event.

  • Start your holiday shopping early with Amazons Holiday Shop and deals on millions of items across the site.


Its that time of year again: sales time!

Amazon officially announced that its multi-day Prime Big Deal Days sales event will be returning October 7-8.

While the sale is still a few weeks away from officially kicking off, shoppers can start saving on select sales today and start preparing for holiday shopping.

Amazon's Prime Big Deal Days returns October 78, kicking off the 2025 holiday shopping season with millions of deals and deep discounts across popular categories like home, apparel, toys, and beauty, the company wrote in a news release.

Starting October 7 at 12:01 a.m. PDT, Prime members can shop seasonal savings across Amazons wide selectionfrom beauty must-haves and top electronics to deals on some of the most anticipated gifts of the season.

Whats on sale now?

Though Amazon is touting millions of items on sale, shoppers dont have to wait to start saving. Heres a look at some of the deals available now:

  • In-store grocery savings: Prime members can save $15 when they spend $55+ at Amazon Fresh through October 8.

  • Amazon devices on sale: A number of products in the Amazon suite of devices are half off right now, including: Kindle, Ring, Fire Tablets, Echo Dot, and more.

  • Prime card holders can save: The Prime Visa credit card comes with extra perks. For starters, upon approval for the card, consumers will receive a $150 Amazon gift card. Then, cardholders will receive extra cashback during Prime Big Deal Days, as well as on year-round purchases.

  • Gas savings: Starting October 3, Prime members can save up to $1.00/gallon on all gas purchases up to 35 gallons at any bp, Amoco, and ampm gas stations.

  • Kindle deals: Eligible Prime members can score up to three months free of Kindle Unlimited, and a select number of titles are currently 80% off.

  • Free McDonalds: Between September 15 and October 5, Prime members who use their free GrubHub+ membership can get a free McDonalds 10-piece chicken nugget every single day (on orders of at least $20).

  • Young adults save more: Primes Young Adult membership comes in at half the price of a traditional membership. Anyone aged 18-24 can get the first six months of Prime free, and then at $7.49/month or $69/year.

  • Artist merch: Those looking for artist merchandise can get 30% off when they shop through Amazon Music.

Prepare for Prime Day

Shoppers must have a Prime membership to qualify for Prime Big Deal Days sales. For those without Prime accounts, you can get a 30-day free trial, before paying either $14.99/month or $139/year.

During the sales, shoppers can take advantage of Amazons Holiday Shop. With curated gift guides, you can start getting your holiday shopping done ahead of time.


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