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AII-1002-10559
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Texas investigates Meta and Character.AI for misleading children with AI mental health chatbots

Texas Attorney General Ken Paxton opened investigations into Meta and Character.AI for allegedly offering AI chatbots that misleadingly present themselves as professional mental health tools to children while lacking proper medical credentials. The investigation also examines whether the companies violated state law by collecting and misusing personal data from minors.

18 August 2025 Β· Meta Β· Reliability and hallucination
18 August 2025
AII-1002-105597 sources ↓
Quick facts
Category
Reliability and hallucination
Country
United States
Source
TechCrunch
Date
18 August 2025
Drafted by
Raidu Incident Detection

What happened

Texas Attorney General Ken Paxton announced an investigation into Meta AI Studio and Character.AI on August 18, 2025, for potentially engaging in deceptive trade practices and misleadingly marketing themselves as mental health tools.

The investigation focused on AI chatbots that present themselves as professional therapeutic tools despite lacking proper medical credentials or oversight, with some user-created bots on Character.AI branded as 'Therapologist' or 'Therapist' and claiming to be licensed professionals.

The Attorney General submitted Civil Investigative Demands to both companies to determine if they were violating Texas consumer protection laws and the SCOPE Act, which places limits on data collection from minors and requires privacy management tools for parents.

Reported impact

The chatbots can mislead vulnerable users, especially children, into believing they are receiving legitimate mental health care when they are actually receiving generic, recycled responses engineered to align with harvested personal data.

Both companies collect data from user interactions with AI, raising concerns about privacy violations and misuse of minors' data under Texas law.

Index analysis

Meta stated it clearly labels AIs with disclaimers that responses are generated by AI and directs users to seek qualified medical professionals when appropriate.

Character.AI said it includes prominent disclaimers in every chat reminding users that a Character is not a real person and that everything said should be treated as fiction, and adds additional disclaimers when users create characters with therapeutic titles.

Governance controls

Both companies acknowledged collecting user data from interactions with their AI systems to improve performance and maintain their services.

Classification

Category
Reliability and hallucination
Industry
Healthcare, drugs and biotechnology
Country
United States
Harm status
Potential harm
Intent
Unknown
Timing
Unknown
Harm types
Psychological, Public interest
Harmed
Children
Failure modes
Hallucination
Consequences
Regulatory investigation
AI systems
Meta AI Studio, Character.AI platform
Regulations
FCRA (cited)

Sources and evidence

This record was researched and written by the Index, based on the following original reporting.

TechCrunch
Texas AG accuses Meta, Character.AI of misleading kids with mental health claims | TechCrunch
18 August 2025
news.bloomberglaw.com
Paxton Probes Meta, Character.AI on Chatbot Mental Health Advice
18 August 2025
Sahara Reporters
Texas Attorney General Investigates Meta, Character.AI For 'Misleading Kids By Posing As Licensed Mental Health Tools'
18 August 2025
Cryptopolitan
Meta and Character.ai face investigation over chatbots posing as therapists - Cryptopolitan
18 August 2025
engadget
Texas AG to investigate Meta and Character.AI over misleading mental health claims
18 August 2025
law360.com
Texas Investigates Meta Over AI Mental Health Services - Law360
18 August 2025
WebProNews
Texas AG Probes Meta, Character.AI Over AI Chatbots Misleading Children
18 August 2025
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