Conspiracy theories about advertisers secretly listening to our phones have been around for years. Now, three companies are in trouble for allegedly pretending they could do just that.<\/p>\n
The Federal Trade Commission announced Thursday that Cox Media Group and two of its partners will pay nearly $1 million to settle allegations that they misled customers about an AI-powered ad service that they claimed could target consumers based on conversations captured via their smart devices.<\/p>\n
According to the FTC, the companies, which also include MindSift and 1010 Digital works, allegedly claimed their \u201cActive Listening\u201d service used a special algorithm to detect relevant conversations captured from phones and other devices to target ads to people in specific geographic areas.<\/p>\n
Cox Media Group first made headlines<\/a> for the service back in 2023, when its own marketing leaned directly into the creepiness of the conspiracy theories.<\/p>\n \u201cIt\u2019s True. Your Devices Are Listening to You,\u201d the company\u2019s website read at the time. \u201cWith Active Listening, CMG can now use voice data to target your advertising to the EXACT people you are looking for.\u201d<\/p>\n The ideas was that small businesses could target people who used certain phrases in their everyday conversations. One example the company used at the time was: \u201cThe AC is on it\u2019s last leg!\u201d<\/p>\n Turns out, all of that was fake. The FTC says the service did not actually listen in on consumers\u2019 conversations. Instead, the service allegedly consisted of reselling email lists obtained from data brokers at a significant markup.<\/p>\n \u201cNot only did the product these companies marketed not do what they claimed it did, but they also misled potential customers by claiming consumers had opted into this service when it\u2019s clear they did not,\u201d Christopher Mufarrige, Director of the FTC\u2019s Bureau of Consumer Protection, said in a press release<\/a>. \u201cIt is a basic rule of business that you need to be honest with your customers, and these companies failed to do that.\u201d<\/p>\n The companies are also accused of misleading customers by claiming consumers agreed to be part of Active Listening when they accepted the terms of service for the apps they used.<\/p>\n \u201cClicking through mandatory terms of service does not constitute \u2018opt-in consent\u2019 for such an invasive service or for use of consumers\u2019 voice data from inside their homes,\u201d the FTC said.\u00a0<\/p>\n The FTC also noted that the service would have violated Section 5 of the FTC Act if it had worked as advertised and if the companies never got proper consumer consent.<\/p>\n Under the proposed settlement, Cox Media Group will pay $880,000, while MindSift and 1010 Digital Works will each pay $25,000. The money will be used to provide refunds to impacted CMG customers.<\/p>\n Cox Media Group and MindSift did not immediately respond to requests for comment. 1010 Digital Works could not be reached for comment. Its website<\/a> now redirects to a page featuring a quote often attributed to Albert Einstein, \u201cThe measure of intelligence is the ability to change.\u201d<\/p>\n