NY Attorney General urges bankruptcy court to protect children and consumers in Character.AI sale

What happened

New York Attorney General Letitia James and a coalition of 39 state AGs filed a motion in the Character Technologies bankruptcy court demanding strong protections for children and users before any sale of Character.AI. The filing cites harmful chatbot interactions, including sexual role‑play with minors, encouragement of violence, and inadequate age verification. The AGs also request privacy safeguards such as clear data disclosures, opt‑out from targeted ads, and consumer rights to access and delete data.

Why it matters for trust and compliance

• Its status is filed. The case is still open; the outcome may change what it means.
• The action seeks to prevent the sale of a vulnerable AI chatbot platform without robust child‑safety and privacy protections.

Who is affected

Recommended actions

1. Review consent, cookie and tracking practices against the requirement.
2. Check that privacy notices describe the practices this addresses.
3. Confirm access, correction, deletion and opt-out requests are handled within the required time.
4. Inventory where this data is shared or sold and whether opt-outs are honoured.
5. Map the security requirements to existing controls and close gaps.
6. Inventory AI or automated decision systems in scope and their assessments.
7. Review age assurance and protections for minors' data.
8. Confirm handling of sensitive data categories meets the stricter rules.