(Bloomberg) -- US investigators are probing weapons screening company Evolv Technologies Holdings Inc., which runs detectors at schools and stadiums, over claims its systems don’t operate as described.

Regulators from the Federal Trade Commission are investigating whether its artificial intelligence systems operate as it claims, correctly identifying weapons that pass through its screeners, according to two people familiar with the probe. 

The company confirmed in a filing Thursday that the FTC “had requested information about certain aspects of its marketing practices.” The company, valued at $582 million, saw shares slide 20% this week.

“The FTC requested information about certain aspects of our marketing practices and we are pleased to answer their questions, as well as educate them about our mission to make communities safer and more secure,” said Alexandra Smith Ozerkis, Evolv’s vice president of corporate communications. “We stand behind our technology’s capabilities and performance track record.”

An FTC spokesperson declined to comment. 

Evolv calls itself “the leader in AI-based weapons detection security screening,” and says its technology has screened more than 60 million people in theaters, school districts and stadiums, including Citizens Bank Park, home of Major League Baseball’s Philadelphia Phillies; Acrisure Stadium, home of the National Football League Pittsburgh Steelers; and SoFi Stadium, host to the NFL’s Los Angeles Chargers.

People pass right through Evolv’s gates, and its system “uses advanced methods and AI to detect weapons and ignore harmless personal items,” flagging alerts to monitors, according to a marketing video. The system lets operators see the location of potential threat on a person’s body or in their bag with clear, visual alerts, according to the company.

The FTC, which has recently increased scrutiny on companies’ claims about artificial intelligence, is seeking information about how AI is involved in Evolv’s detectors, the people familiar with the probe said, speaking on condition of anonymity because details of the investigation aren’t public. In a February blog post, the agency told marketers to “Keep your AI claims in check.” 

Evolv’s claims about its system’s effectiveness have been challenged by IPVM, a Pennsylvania-based technology watchdog. In a recent video, the group said false alarm rates were as high as 60% at school systems that use the system to screen students. 

A 2021 technical report also found Evolv’s system was unable to consistently detect knives, according to a draft copy of the report that IPVM later posted online. 

Evolv’s March 2022 press release announcing the technical report didn’t mention that assessment. The company also took issue with IPVM’s criticisms, saying that providing more information could “show bad actors how to circumvent the process.”

In a demo video posted to Evolv’s website, an executive is asked if the system detects knives.

“The Express is designed to find, you know, weapons that can cause mass casualty events,” Jeff Cahill, director of support and training, said in the video. “So that includes bombs and handguns and long guns and also tactical knives that are, you know, large in variety.”

In August, Chief Executive Officer Peter George told investors that a new version of the system would be better at identifying knives. “While we have long provided exceptional detection capabilities with guns and bombs and larger tactical knives, 6.0 is designed to extend our detection capabilities with respect to smaller-bladed weapons,” he said.

Customers used Evolv Express to detect over 176,000 weapons in 2022, including 93,000 guns and 83,000 knives, George said earlier.

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