The Federal Trade Commission has filed suit against Delaware-based Air AI Technologies and its founders, accusing the company of deceiving small businesses and entrepreneurs with false promises of profits, growth, and guaranteed refunds. The case, filed in the U.S. District Court for the District of Arizona, seeks to halt Air AI’s allegedly unlawful practices.
According to the FTC’s complaint, Air AI—also known as Air.AI and Scale 13—along with its owners Caleb Matthew Maddix, Ryan Paul O’Donnell, and Thomas Matthew Lancer, marketed “conversational AI” tools as replacements for human customer service. The company told clients they could earn tens of thousands of dollars in days and even millions over time by using its services. Instead, regulators say many entrepreneurs lost significant sums, in some cases up to \$250,000, and were left in debt.
The FTC alleges Air AI compounded the harm by promoting refund guarantees that it rarely honored. Customers were told they would receive refunds if they failed to double or triple their investment within a set time period or were unsatisfied for any reason. In practice, the agency claims, refund requests were met with delays or silence, leaving buyers without recourse.
“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,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection.
The lawsuit also charges Air AI with violating the Telemarketing Sales Rule and the Business Opportunity Rule. Regulators say the defendants misrepresented the performance of their products, failed to provide required disclosure documents, and falsely advertised profitability and refund policies.
The FTC’s unanimous 3-0 vote to pursue the case underscores its focus on protecting small businesses from deceptive AI marketing schemes. Consumers are encouraged to report fraud at ReportFraud.ftc.gov.
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