Just Answer, Pearl, AskALawyer Accused sued by FTC : NPR

An example of one of the websites controlled by Just Answer.

Federal Trade Commission

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Federal Trade Commission

An artificial intelligence-powered search engine known as Pearl presents itself as a distinctive service. It offers answers generated by a large language model, then a human is involved for follow-up questions and fact-checking.

There is only one problem, according to a trial filed Tuesday by the Federal Trade Commission: The company’s offerings are allegedly a ploy to lock consumers into recurring fees they don’t want, a scheme that has ensnared hundreds of thousands of people and that federal regulators call “widespread consumer deception.”

Here’s how federal investigators say it worked. A person browsing the web clicks on an ad related to their online search and arrives at one of the many landing pages operated by the company. Some domains include JustAnswer.com, AskWomensHealth.com, AskALawyer.com, Pearl.com and hundreds of others.

Then, a chatbot assistant, known as Pearl, asks more questions about the search before sending the user a form to join the company’s question-and-answer service for $1 or $5. Once credit card information is submitted, the company begins tracking consumers, according to the federal complaint.

“JustAnswer charges consumers both a $1 or $5 membership fee and a significantly higher monthly subscription fee immediately upon signup,” according to the lawsuit filed by federal regulators, who began investigating the company in 2022.

The unwanted monthly fees, which can be as high as $79, continue each month until consumers cancel – which is revealed in small print above a big orange button that says: “Confirm Now.”

Federal investigators say this process deceived hundreds of thousands of consumers, which the suit says led to a flood of complaints describing the company’s “fraudulent” behavior.

The company’s CEO, Andy Kurtzig, was aware of the consumer deception and refused to make changes, according to the complaint.

In a statement, a spokesperson for JustAnswer said it was “disappointed” by the lawsuit after working with the FTC for nearly three years.

“We clearly publish our pricing and model in advance, and make cancellation simple and convenient through multiple channels, including a 24/7 toll-free number, live chat, email and one-click web,” said Ashe Reardon, spokesperson for JustAnswer.

The suit alleges that JustAnswer violated federal consumer protection laws and seeks an injunction against the company.

JustAnswer has about 700 employees and has raised about $50 million, according to business information company PitchBook.

The alleged techniques are an example of so-called “dark patterns.” This is the technical term used to describe companies that entice consumers to sign up for services and maintain their subscriptions.

Lina Khan, former chairwoman of the FTC, whose investigators launched the investigation into JustAnswer, called out such corporate behavior. She has filed similar actions against major tech companies, including Amazon, which the FTC said had deployed dark patterns to encourage consumers to automatically renew their Amazon Prime subscriptions.

Lior Strahilevitz of the University of Chicago Law School, who studies dark patterns, said the FTC case highlights the age-old problem of missing the fine print before a purchase, a problem that continues to be prevalent online.

“The FTC and state attorneys general pursue companies that employ illegal dark models quite frequently,” Strahilevitz said. “Yet these dark schemes can be a very profitable way to scam consumers, as some consumers will not notice the charges or request a refund promptly.”