The Federal Trade Commission (FTC) has finalized orders against Cox Media Group (CMG) and two associated marketing firms, MindSift LLC and 1010 Digital Works LLC, requiring them to pay a total of $930,000. This settlement addresses allegations that the companies deceived customers by falsely claiming to offer an AI-powered service capable of targeting localized ads based on conversations captured from consumers’ smart devices.

In complaints first announced in May, the FTC asserted that CMG, based in Georgia, along with its partners in New Hampshire and Wisconsin, misrepresented their marketing capabilities. They claimed to utilize a special algorithm to listen in on conversations from smart devices to deliver targeted advertisements to consumers in specific geographic areas. However, the FTC found that the service did not actually rely on voice data, and consumers had not consented to such data collection.

The proposed orders require CMG to pay $880,000, while MindSift and 1010 Digital Works will each pay $25,000. These funds will be used to provide redress to customers affected by the misleading practices. Furthermore, the orders prohibit the companies from making any false claims regarding their advertising services, including the collection and use of voice data and the consent of consumers.

After reviewing two comments on the proposed settlement, the FTC voted 2-0 to approve the consent agreements, reinforcing the importance of truthful advertising practices in the marketing industry.