As AI Evolves, The FTC Takes Action Against Evolv’s AI Powered Security System Claims

The Federal Trade Commission (FTC) is taking action against the AI-powered securities systems company Evolv Technologies (NASDAQ: EVLV) claiming the company made false statements regarding the extent to which its security screening systems can detect weapons while ignoring harmless personal items. These systems have been placed in a variety of public settings such as arenas, healthcare facilities, sports venues and schools. School systems make up approximately 50% of Evolv’s business and are in 800 schools across 40 states.

The FTC’s proposed settlement order would ban Evolv from making unsubstantiated claims related to its products’ ability to detect weapons through the use of AI and would give some school customers (K-12) the option to cancel their subscriptions which typically locks customers into multi-year deals.

“The FTC has been clear that claims about technology – including artificial intelligence – need to be backed up, and that is especially important when these claims involve the safety of children,” said Samuel Levine, Director of the Bureau of Consumer Protection. “If you make those claims without adequate support, you can expect to hear from the FTC.”

According to the FTC claim, the agency has alleged that Evolv’s Express scanners failed in several instances to detect weapons in schools while flagging harmless personal items typically brought to schools, like laptops, binders, and water bottles. For example, Evolv’s Express scanners reportedly failed to detect a seven-inch knife brought into a school in October 2022 that was used to stab a student. Afterwards, school officials increased the system’s sensitivity settings, prompting a 50% false alarm rate.

To reduce false positive rates, Evolv in 2023 introduced a more sensitive setting for Express users with the goal of detecting more knives. Despite this, Evolv said some knives will be missed, more false alarms will occur, and additional staffing may be required to run the machines. It also advised schools to add conveyor belts and other measures to divert harmless items by hand, which makes the system more like traditional lower-cost metal detectors according to the complaint.

Under the proposed settlement, Evolv will be required to notify certain K-12 school customers that they can opt to cancel contracts signed between April 1, 2022, to June 30, 2023. In addition, the proposed order also will prohibit Evolv from making additional misrepresentations related to weapon detection, product accuracy, the accelerated process and lower cost vs. traditional detectors, and the material aspect of its performance including AI.