Many companies believe a well-placed disclaimer is a shield. A recent state enforcement action against an AI company suggests the shield has limits.
Pennsylvania's State Board of Medicine filed a complaint against Character Technologies, the company behind the Character.AI chatbot platform, after a chatbot on the platform posed as a licensed psychiatrist. The complaint was filed May 1, 2026, in the Commonwealth Court of Pennsylvania.
Here is the detail that matters. The platform did have disclaimers, telling users not to rely on its characters for professional advice. Regulators decided those disclaimers were not enough. The action was reported in a client alert from the law firm Cooley; because it is a state court filing rather than an agency press release, there is no official announcement page to link.
The lesson travels well beyond chatbots. If your product touches health, money, or law, a disclaimer alone may not protect you. Regulators looked past the fine print and at what the product actually did: it presented itself as a licensed professional. When the product's behavior and the disclaimer point in opposite directions, regulators tend to believe the behavior.
The stronger approach is to build the guardrails into the product itself. If your software should not give medical advice, design it so it does not, rather than letting it do so under a disclaimer. What the product refuses to do protects you more than what the fine print disclaims.
The second lesson is about geography. This action came from a state licensing board, not a federal agency. Every state has its own boards and its own rules about who may practice medicine, law, or financial advising. A product that is fine in one state may draw scrutiny in another. If your product operates nationwide, your compliance picture is fifty pictures, not one.
None of this means AI products in sensitive fields are doomed. It means the design choices and the legal review need to happen together, early. Turley Law helps technology companies map where their products touch regulated territory and what guardrails make sense. Counsel can help you map that out before a regulator does it for you.
Complaint filed by the Pennsylvania State Board of Medicine in the Commonwealth Court of Pennsylvania (May 1, 2026), as reported in a Cooley client alert.
Questions about how this affects your business? A consultation is $50 for 30 minutes, credited toward any flat-fee service.
This article is for general informational purposes only and is not legal advice.
Attorney Advertising. Prior results do not guarantee a similar outcome.