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State AG coalition seeks consumer protections in Character.AI bankruptcy

Character Technologies, Inc.October 14, 2026Colorado Attorney General

Summary

Colorado Attorney General Phil Weiser led a multistate coalition in filing a notice in Character Technologies, Inc.’s bankruptcy, citing concerns about the company’s safety and privacy practices and sensitive chatbot conversations involving children and adults. The filing seeks protections in any sale or transfer of the company’s business or assets; no penalty or final remedy is reported.

Contract Impact

Review vendor and data-processing agreements for restrictions on collecting, using, retaining, and transferring sensitive chatbot conversations, especially children’s data and mental-health information, and require safeguards that survive a change of ownership or bankruptcy asset sale. Check customer-facing terms and privacy notices for clear disclosures and enforceable protections around minors’ access and sensitive data. For vendors and service providers, confirm security, retention, deletion, and breach-notification obligations, and ensure any assignment or change-of-control clause requires appropriate review and preserves privacy commitments.

Contract Search Terms

sensitive personal informationchildren's data protectionschatbot conversation datamental health datadata sale or transfer restrictionsdata processing and security obligationsdata retention and deletionage assurance and parental consent

Violation Types

Entity Details

Entity

Character Technologies, Inc.

Industry

Technology

Multistate Coalition

AlaskaArkansasCaliforniaConnecticutDelawareDistrict of ColumbiaHawaiiIdahoIllinoisKansasKentuckyLouisianaMaineMassachusettsMichiganMinnesotaMississippiNevadaNew HampshireNew JerseyNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeUtahVermontVirginiaWashingtonWisconsinWest Virginia

Official Sources

Source Evidence

Entity Name
"Character Technologies, Inc."
Event Date
"Oct. 14, 2026 (DENVER)"
Violation Types
"The states’ investigation identified potential consumer protection and privacy violations."
Violation Types
"Through chats with these characters, the company has collected sensitive consumer data, including private conversations about users’ mental health, relationships, and emotional struggles."
Is Multistate
"Attorney General Phil Weiser today led a coalition of state attorneys general in filing a notice in the bankruptcy proceedings of Character Technologies, Inc."
Document Urls
"https://coag.gov/app/uploads/2026/10/States-Notice-of-Interest-as-Filed.pdf"

Related Enforcement Actions

NY

Character Technologies, Inc.

New York Attorney General Letitia James and a bipartisan coalition of 39 other attorneys general filed a motion in Character Technologies, Inc.’s bankruptcy, citing risks to children and sensitive user information and potential violations of state privacy laws. The coalition asks the court, the company, and any prospective buyer to require meaningful privacy and safety protections; no fine or final remedy is reported.

CT

Character Technologies, Inc.

Connecticut joined a coalition of state attorneys general filing a notice in Character Technologies, Inc.’s bankruptcy proceedings, raising concerns about the company’s safety and privacy practices and the sensitive information it holds. The states seek protections for children and consumers if the company’s business or assets are sold or transferred; the filing does not impose a fine or other remedy.

CO

Online retailers (not specifically named)

Colorado Attorney General Phil Weiser issued a public advisory explaining that e-bikes must meet statutory class requirements and that retailers must clearly disclose what they are selling. The advisory warns that marketing a higher-powered electric vehicle as an e-bike without required disclosures may violate state consumer protection law; it announces no penalty or binding remedy.

CO

U.S. Department of Labor

Colorado Attorney General Phil Weiser and a multistate coalition sued the U.S. Department of Labor over its termination of grants for unemployment insurance system improvements. The states allege the terminations breached their grant agreements and seek money damages; the release does not describe a privacy violation or an imposed penalty.

CO

U.S. Department of Health and Human Services

Colorado Attorney General Phil Weiser joined a multistate coalition in a comment letter opposing HHS’s proposed cuts to Head Start standards. The letter argues the changes could reduce protections and services for children and families; it is an advocacy action, not an enforcement action imposing a penalty or remedy.

CO

Colorado landlords

Colorado Attorney General Phil Weiser issued an advisory reminding landlords of expanded housing protections for survivors of domestic violence, abuse, stalking, and unlawful sexual behavior. The advisory describes obligations involving repayment plans, lease termination, safety measures, and confidentiality; it does not announce a fine or enforcement order against a named landlord.