The Federal Trade Commission (FTC) has gone to court to shut down a Delaware-based artificial intelligence (AI) firm it says misled entrepreneurs with false promises of fast profits and guaranteed refunds.
The FTC says it is suing Air AI Technologies for luring small business owners to make big investments with deceptive claims about business growth, earnings potential, and refund guarantees.
Air AI Technologies marketed its flagship “conversational AI” as a tool that could replace human staff and generate life-changing earnings. The company allegedly told small businesses they could earn back their investment many times over in just months.
Instead, regulators allege, the venture left customers stranded. Some entrepreneurs lost as much as $250,000 and many are drowning in debt after paying for business coaching packages, reseller licenses, and a so-called Air AI Access Card. Refund guarantees were rarely honored, with consumers reporting delays and silence when they tried to recover their money.
Says Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection,
“Companies that market AI-related tools with false promises of unrealistic investment returns and guaranteed refunds harm hardworking small business owners and undermine legitimate business’s adoption of AI. The FTC is focused on ensuring the promise of new technology isn’t misused as a means to mislead consumers.”
The lawsuit, filed in federal court in Arizona, names Air AI and affiliated entities alongside operators Caleb Matthew Maddix, Ryan Paul O’Donnell, and Thomas Matthew Lancer. Regulators accuse them of violating consumer protection laws, making unsubstantiated earnings claims, and misrepresenting refund policies.
The Commission says the scheme not only drained small businesses but also undermines confidence in legitimate AI ventures.
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.