Texas Attorney General Ken Paxton has opened an investigation into Meta AI Studio and Character.AI for deceptive practices in marketing AI chatbots as mental health services to children. The platforms are accused of impersonating licensed professionals, fabricating qualifications, and exploiting user data for advertising without proper disclosure. Civil Investigative Demands have been issued to examine violations of Texas consumer protection laws and the SCOPE Act.
In-house legal teams should review all customer-facing agreements (Terms of Service, End User License Agreements) and any vendor/data processing agreements involving AI-driven mental health or wellness services. Focus on clauses governing data collection and sharing (especially for advertising), consent mechanisms (particularly for minors), representations about service nature and provider qualifications, and compliance with the SCOPE Act. Required changes include adding clear disclaimers that AI chatbots are not licensed professionals, implementing verifiable parental consent for users under 18, disclosing any use of user data for advertising, inserting warranties against false claims of professional credentials, and incorporating specific SCOPE Act compliance measures such as parental access and control provisions.
Entity
Meta AI Studio and Character.AI
Also known as: Meta and Character.AI
Industry
TechnologyOfficial Press Release
https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-investigates-meta-and-characterai-misleading-children-deceptive-ai
attorney general ken paxton launches investigations characte
https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-launches-investigations-characterai-reddit-instagram-discord-and-other
Texas Attorney General Enforcement Page
https://www.texasattorneygeneral.gov/consumer-protection/privacy
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$150.0M
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$45.0M
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