Automators AI online sales and coaching fraud

The US Federal Trade Commission (FTC) sued Automators LLC for luring consumers into investing USD 22 million in online stores supposedly powered by AI.

Automators LLC had promised customers high returns on investment in online stores on Amazon.com and Walmart.com, claiming to use AI and machine learning to ensure success and profitability. The company also offered to teach consumers how to successfully set up and manage e-stores themselves using a 'proven system' and the powers of artificial intelligence.

However, the 'vast majority' of Automators' clients did not make the promised earnings or recoup their investment, instead losing significant capital. Amazon and Walmart subsequently suspended Automators' stores, and a temporary injunction issued by a Southern California federal court suspended the company’s operations.

The Automators’ case was the first brought by the FTC relating to AI scams, and was seen to serve as a warning to other companies using AI for fraudulent business practices. The FTC published a warning about misleading AI marketing in February 2023.