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Jim Gatto is a partner in the Intellectual Property Practice Group in the firm’s Washington, D.C. office. He is Co-Leader of the Artificial Intelligence Team, the Blockchain & Fintech Team, and Leader of the Open Source Team.

On October 24, the CFPB issued Circular 2024-06, which warns companies using third-party consumer reports, particularly surveillance-based “black box” or AI algorithmic scores, that they must follow the Fair Credit Reporting Act with respect to the personal data of their workers. This guidance adds to the growing body of law that protects employees from potentially harmful use of AI.Continue Reading CFPB Warns Employers Regarding FCRA Rules for AI-Driven Worker Surveillance

On August 28, the CFPB issued a Consumer Advisory warning that it believes video game companies are targeting children for monetary gain. With 45.7 million U.S. children engaged in video gameplay, the agency is concerned about the financial risks that games and virtual worlds pose, especially to young consumers. This Advisory highlights a growing focus on the game industry’s practices, which allegedly mimic traditional banking systems but lack corresponding consumer protections. Continue Reading The CFPB Continues to Reshape Consumer Protection in the Digital Arena 

The Consumer Financial Protection Bureau (“CFPB”) published a report on Banking in Video Games and Virtual Worlds (“Report”) that warns of greater scrutiny of and enforcements against the financial services offered in games and virtual worlds that increasingly resemble traditional financial products and services offered by regulated banking and payment systems. The Report is applicable to all types of games and virtual worlds, but creators and publishers of blockchain games and metaverses, in particular, should take note of this report.Continue Reading CFPB Report Targets Games and Virtual Worlds – What Blockchain Game and Metaverse Companies Need to Know

On April 4, the CFPB published a new Issue Spotlight, titled “Banking in Video Games and Virtual Worlds” that analyzes the increased commercial activity within online video games and virtual worlds and the apparent risks to consumers—in this case, to online gamers. In particular, this report examines how “game assets” are being used and the associated risks, including the emergence of products or services that resemble traditional consumer financial products or services. Continue Reading Report Signals CFPB Taking Aim at Video Game and Virtual Worlds Industries

The rapid rise of AI used with advertising, marketing and other consumer facing applications has caused the FTC to continue to take notice and issues guidance. For example, the FTC is concerned about false or unsubstantiated claims about an AI product’s efficacy. It has issued AI-related guidance in the past. The following is some recent FTC guidance to consider when referencing AI in your advertising. This guidance is not necessarily new, but the fact that it is being reiterated should be a signal that the FTC continues to focus on this area and that actions may be forthcoming. In fact, the recent guidance states: “AI is important, and so are the claims you make about it. You don’t need a machine to predict what the FTC might do when those claims are unsupported.”Continue Reading You Don’t Need a Machine to Predict What the FTC Might Do About Unsupported AI Claims