New York Fines Hidden AI Ad Images Up To $5,000. Disclosure Is Not Optional. The Patchwork Will Confuse You.
Advertisers using AI-generated images or AI-generated people in ads face a regulatory patchwork across jurisdictions. New York can fine advertisers up to $5,000 for failing to disclose that an ad used an AI-generated person. The FTC also applies its existing advertising rules, meaning if AI makes an ad misleading, federal enforcement applies on top of state penalties.
This illustrates the principle of jurisdictional fragmentation in AI regulation. No single body governs AI disclosure in advertising. You must comply with the strictest applicable rule, not the average one. The mechanism is simple: state laws layer on top of federal FTC authority, and ignorance of either layer does not protect you.
New York state legislature and the FTC are the enforcement bodies cited. The source references Komando.com's Splash of AI newsletter as the publication distributing this guidance to marketers.
- Open your drafted ad in whatever tool you used to create it. Check whether any person, scene, or product in the image was generated by AI. Write down which elements are synthetic.
- Add a visible disclosure label to the ad creative itself, such as text reading AI-generated image, positioned where a reasonable viewer would notice it before engaging with the ad.
- Document your disclosure in a simple spreadsheet with the date, ad platform, and exact wording used. This record is your evidence of good-faith compliance if any regulator questions the ad later.