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
$3.0M
Texas Attorney General Ken Paxton announced a settlement requiring Temu to protect Texans’ sensitive personal data from exposure to the Chinese Communist Party and to strengthen product-safety practices. Temu must pay Texas $3 million, comply with data-security requirements backed by a potential $8 million annual penalty, conduct annual independent product testing, and take specified action on products found to contain harmful substances.
$773.0M
Texas Attorney General Ken Paxton announced that a multistate coalition had secured an opioid settlement with Albertsons, which would require the grocery chain to pay more than $773 million nationally once final. Texas and its political subdivisions may receive up to $57.8 million for opioid abatement; the release does not identify privacy violations.
Texas Attorney General Ken Paxton sued Gerber Products Company and Nestlé USA, Inc., alleging that Gerber made deceptive safety and testing claims while its baby food contained dangerous levels of toxic heavy metals. The lawsuit asserts claims under the Texas Deceptive Trade Practices Act; the release does not report a settlement, monetary penalty, or court order.
$1.5M
The Texas Attorney General obtained a judgment holding Rubinsky Roofing LLC liable for 27 violations of the Texas Deceptive Trade Practices Act, including deceptive practices involving older consumers and payment for unnecessary or unfinished repairs. The judgment requires more than $1.5 million in civil penalties, allocates at least $500,000 to consumer restitution, and permanently bars the company and its owner from the practices at issue.
The Texas Attorney General opened an investigation into UnitedHealth Group over allegations that its insurance-benefit administration and patient-care decisions denied Texans medically necessary healthcare. The AG issued Civil Investigative Demands to collect evidence; the release announces no penalty or remedy.
$7.5M
Texas Attorney General Ken Paxton announced a $7.5 million settlement with Tris Pharmaceuticals over alleged misrepresentations about the efficacy of Dyanavel XR, an ADHD drug marketed for children. The release says the company overstated the drug’s efficacy and directed sales representatives to make misleading claims to doctors, including Medicaid providers.