Consumers Affected
20,000,000
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.
No remedy was imposed in the described filing. The coalition asks for protections including a comprehensive privacy program, clear disclosures, effective targeted-advertising opt-outs, limits on using private conversations for AI training or other commercial purposes without valid consent, and consumer access and deletion before any sale.
Review vendor and AI-provider data processing agreements for restrictions on using private conversations, voice calls, health disclosures, and other sensitive data for model training, advertising, or other commercial purposes without valid consent; require clear disclosures, effective opt-outs, and consumer access and deletion rights. Check customer-facing terms and privacy notices for accurate descriptions of data use and age-related safeguards, and employee or support procedures for handling disclosures of suicidal or self-harming behavior. Vendor agreements should also address robust age verification, harmful-content controls, security and confidentiality, and limits on transferring user data in a bankruptcy, sale, or other change of control, including advance notice and protections for deletion or access requests.
Entity
Character Technologies, Inc.
Industry
TechnologyOfficial Press Release
https://ag.ny.gov/press-release/2026/attorney-general-james-urges-court-protect-children-and-consumers-characterai
alaska et al v characters technologies inc notice of interes
https://ag.ny.gov/sites/default/files/court-filings/alaska-et-al-v-characters-technologies-inc-notice-of-interest-2026.pdf
New York Attorney General Enforcement Page
https://ag.ny.gov/press-releases
"Character Technologies, Inc., the company behind Character.AI"
"potential violations of state privacy laws"
"The platform never notified her parents or sought help; instead, it drew her into “abusive sexual acts” and professed its love for her."
"potential violations of state privacy laws"
"Under a new law enforced by OAG, AI companion companies must take reasonable steps to detect and respond to expressions of suicidal thoughts or self-harm."
"The platform has more than 20 million monthly users, including more than two million accounts registered to users self-declared as under 18."
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.
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.
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.
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.
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.
$2.6M
New York and Connecticut reached a settlement with Boston Children’s Health Physicians and its IT security provider, XTIUM, after a 2024 breach exposed private information of approximately 825,000 New York residents and 62,871 Connecticut residents. The companies will pay $2.64 million and implement enhanced cybersecurity measures; additional penalties are conditional on violating the settlement.