Severity major: A regulator was involved. A coalition of state attorneys general, including Virginia's, filed a notice in the bankruptcy proceedings of Character Technologies over chatbots promoted to users as therapists and psychologists and the company's collection of users' sensitive conversations.
Earliest source we hold 2026-10-17
Virginia joined a coalition of state attorneys general in filing a notice in the bankruptcy proceedings of Character Technologies, Inc., the company behind Character.AI. Virginia's attorney general said the platform's chatbots were allowed and promoted to users as 'therapists' and 'psychologists' despite serious risks, and his office said the company collected sensitive consumer data, including private conversations about users' mental health. Several states began investigating after a 2024 wrongful-death lawsuit alleging that Character.AI's chatbots reinforced a Florida 14-year-old's suicidal thoughts and contributed to his death.
Risk grouping: Harm by design
Who caused it
A person or organisation ““Character.AI’s chatbots raised serious concerns about health and safety, including chatbots which were not only allowed on the platform, but promoted to users, as ‘therapists’ and ‘psychologists’ despite serious risks these chatbots posed,” Jones said in the press release.”source
Intended or not
Intended ““Character.AI’s chatbots raised serious concerns about health and safety, including chatbots which were not only allowed on the platform, but promoted to users, as ‘therapists’ and ‘psychologists’ despite serious risks these chatbots posed,” Jones said in the press release.”source
Before or after release
After release “Several states, including Virginia, began investigating Character.AI following a 2024 wrongful death lawsuit alleging that its chatbots fostered an emotionally and sexually exploitative relationship with a Florida 14-year-old, reinforced his suicidal thoughts, and contributed to his death by suicide.”source
The AI's part
Caused it “Several states, including Virginia, began investigating Character.AI following a 2024 wrongful death lawsuit alleging that its chatbots fostered an emotionally and sexually exploitative relationship with a Florida 14-year-old, reinforced his suicidal thoughts, and contributed to his death by suicide.”source
The story
1 · What it was doingCharacter.AI ran a consumer chatbot platform where users chatted with AI 'characters', some presented as therapists, psychologists and doctors, and it collected sensitive conversations about mental health and relationships.
2 · What went wrongThe chatbots were allowed and promoted as therapists and psychologists despite serious health and safety risks, and the platform collected sensitive consumer data, raising consumer protection and privacy concerns.
3 · What it reached or didUsers including minors, whose private conversations about mental health and relationships were collected; a 2024 lawsuit tied the chatbots to a Florida 14-year-old's suicide.
4 · How it was caughtThe source says several states began investigating after a 2024 wrongful death lawsuit.
5 · What was doneVirginia and other states filed a notice in Character.AI's bankruptcy proceedings seeking protections for children and consumers in any sale; the company cited its safety measures and disputed the filing's portrayal.
content classifiers, prominent disclaimers, age assurance, time spent notifications, helpline popups, teens policy restrictions
C one secondary source states it
Stage of use
in live use
D inferred by us from the described behaviour, reason shown
Whose system
company using AI
D inferred by us from the described behaviour, reason shown
What it was for
Chatbot characters designed to mimic human conversation and relationships, including personas presenting as psychologists, therapists and doctors
C one secondary source states it
What happened
Earliest source we hold
2026-10-17
A the date the source itself carries
What was done
Teens Policy Update cutting off open-ended chat for under-18 users; global age assurance and in-house age estimation model; prominent disclaimers in every chat; classifiers to enforce content policies; time spent notifications; verified helpline popups with Throughline and Koko; separate model for under-18 users with Parental Insights and filtered Characters
C one secondary source states it
Earlier warning signs
2024 wrongful death lawsuit alleging chatbots fostered an exploitative relationship with a Florida 14-year-old and contributed to his suicide
C one secondary source states it
What went wrong
produced harmful content
D inferred by us from the described behaviour, reason shown
AI agent
no AI agent acted
D inferred by us from the described behaviour, reason shown
Impact
Severity
major
C one secondary source states it
Kind of harm
privacy
D inferred by us from the described behaviour, reason shown
Who was affected
Users, including minors, whose private conversations about mental health, relationships and emotional struggles were collected
C one secondary source states it
Kinds of data exposed
personal information, mental health
C one secondary source states it
Why this severity
A regulator was involved. A coalition of state attorneys general, including Virginia's, filed a notice in the bankruptcy proceedings of Character Technologies over chatbots promoted to users as therapists and psychologists and the company's collection of users' sensitive conversations.
C one secondary source states it
Context
Industry
Information
D inferred by us from the described behaviour, reason shown
Country
United States
D inferred by us from the described behaviour, reason shown
Rules that apply
Kentucky Attorney General lawsuit, Pennsylvania lawsuit, cease-and-desist from Disney
C one secondary source states it
Legal action
a case filed
C one secondary source states it
LR-2026-0207 · version 7 · published 2026-10-25 after automatic checks; not yet checked field by field by a person · changes to this case · JSON