Source: JD Supra

On May 21, 2026 the Federal Trade Commission announced an AI-washing action brought in three separate complaints against CMG Media Corporation (CMG) and two smaller marketing firms, alleging they deceived small business customers about an “Active Listening” AI tool that purportedly detected conversations from smart devices and used voice data for geographically targeted ads. The FTC alleges the defendants did not use any such tool, collected no voice data, obtained no consumer consent, and instead purchased email lists from data brokers to resell to customers at a significant markup, conduct the Commission says violated the FTC Act. The complaints against the two smaller firms add a second deception count alleging they provided CMG with marketing materials that served as the means and instrumentalities (M&I) to deceive customers.

The proposed administrative orders would require the three companies to pay a collective $930,000, funds the Commission indicated it would use to provide redress to affected CMG customers, and would bar defendants from misrepresenting features of their services, collection and use of voice data and consumer consent, and geographic targeting capabilities; the orders will undergo a public notice and comment process. The report notes this action is the thirteenth AI-washing case filed by the FTC since 2024, that seven of the last eight involve marketing claims made to other businesses, that the complaint follows the Commission’s December 2025 Rytr LLC order refining M&I doctrine, and that in April 2026 FTC Chairman Andrew Ferguson described the agency’s approach as targeting bad actors who undermine innovation through deception, encouraging companies marketing AI products to ensure their claims are supported.