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Forty attorneys general raise child safety and privacy concerns in Character.AI bankruptcy

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

Summary

Minnesota and 39 other attorneys general filed 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, including children’s private chatbot conversations. The states seek protections for consumers in any sale or transfer of the business or assets; the filing does not impose a penalty or establish a final remedy.

Remedy

No remedy was imposed in the notice. The states called for consumer privacy and safety protections in any sale or transfer and reserved their rights to challenge a proposed sale or bankruptcy plan and seek additional protections.

Contract Impact

Review vendor and AI-provider agreements for limits on collecting and using children’s and sensitive health-related conversation data, age-assurance obligations, safeguards against harmful chatbot outputs, and escalation or parental-notification procedures when a minor may be at risk. Check data-processing and retention clauses for access, deletion, and restrictions on using conversations to train models, and confirm that privacy and safety commitments survive a sale, assignment, or change of control. Customer-facing terms and privacy notices should accurately describe chatbot capabilities, risks, data practices, and protections for minors; employee agreements and internal procedures should address escalation and handling of sensitive user disclosures.

Contract Search Terms

AI chatbot data processing termschildren's data and age assurancesensitive conversation datahealth and mental health dataparental notification and escalationAI safety and content moderationdata retention and deletionbusiness transfer and change-of-control privacy protections

Violation Types

Entity Details

Entity

Character Technologies, Inc.

Industry

Technology

Multistate Coalition

Alaska Attorney GeneralArkansas Attorney GeneralCalifornia Attorney GeneralColorado Attorney GeneralConnecticut Attorney GeneralDelaware Attorney GeneralDistrict of Columbia Attorney GeneralGeorgia Attorney GeneralHawaii Attorney GeneralIdaho Attorney GeneralIllinois Attorney GeneralIndiana Attorney GeneralKansas Attorney GeneralKentucky Attorney GeneralLouisiana Attorney GeneralMaine Attorney GeneralMassachusetts Attorney GeneralMichigan Attorney GeneralMississippi Attorney GeneralNevada Attorney GeneralNew Hampshire Attorney GeneralNew Jersey Attorney GeneralNew York Attorney GeneralNorth Carolina Attorney GeneralNorth Dakota Attorney GeneralOhio Attorney GeneralOklahoma Attorney GeneralOregon Attorney GeneralPennsylvania Attorney GeneralRhode Island Attorney GeneralSouth Carolina Attorney GeneralSouth Dakota Attorney GeneralTennessee Attorney GeneralUtah Attorney GeneralVermont Attorney GeneralVirginia Attorney GeneralWashington Attorney GeneralWisconsin Attorney GeneralWest Virginia Attorney General

Official Sources

Source Evidence

Entity Name
"Character Technologies, Inc."
Violation Types
"The states’ investigation has identified potential consumer protection and privacy violations as well as other very concerning conduct, such as chatbots posing as licensed professionals, exposure of young users to sexualized and violent conduct, weak age checks, and misleading safety claims."
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
"Minnesota Attorney General Keith Ellison, as part of a broad, bipartisan coalition of 40 attorneys general, has filed a notice in the bankruptcy proceedings of Character Technologies, Inc."

Related Enforcement Actions

NJ

Character Technologies, Inc.

New Jersey joined a coalition of state attorneys general in filing a notice in Character Technologies, Inc.’s bankruptcy proceedings, raising concerns about the company’s safety and privacy practices and the sensitive conversations it holds, including those involving children and mental health. The states seek safeguards for consumers’ personal information in any sale or transfer of the company’s business or assets; the release does not report a fine or final finding of violations.

VA

Character Technologies, Inc.

Virginia joined a multistate coalition filing a notice in Character Technologies, Inc.’s bankruptcy proceedings, raising concerns about the company’s privacy and safety practices and the sensitive chatbot conversations it holds. The filing seeks protections for children and consumers in any sale or transfer of the business or assets; the release does not report a fine or final finding of violations.

CO

Character Technologies, Inc.

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.

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.

MN

Trajector Holdings, LLC

Minnesota Attorney General Keith Ellison issued a consumer alert explaining how veterans, their families, and others who believe Trajector Holdings owes them money can file claims in the company’s Chapter 11 bankruptcy. The release announces no privacy violation, enforcement penalty, or remedy against the company.