Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC seeks to stop seller from falsely touting benefits of 'conversational AI' product, (Aug 26, 2025)

By Elizabeth C. Pope, J.D.

Air AI allegedly left many entrepreneurs and small businesses in debt, with losses up to $250,000.

Several companies falsely represented to small business owners and entrepreneurs that their conversational AI product can replace human customer service representatives and, in combination with other services, make business owners significant sums of money, according to an FTC complaint (FTC v. Air AI Technologies, Inc., No. 2:25-cv-03068-SMB (D. Ariz. Aug. 25, 2025)).

The FTC alleged that since 2023, Air Ai Technologies, along with five other companies (Apex Holdings Group LLC, Apex Scaling LLC, Apex 4 Kids LLC, New Life Capital LLC, and Onyx Capital LLC) and their owners have used online and telephone advertising to market their flagship product, describing it as “conversational AI”. Air Ai claims the product is capable of replacing human customer service representatives. Additionally, when the product is used in combination with coaching and other services, Air Ai boasted that some customers were making a million dollars.

Air AI’s consumers often did not earn the promised profits or even recoup the money paid to Air AI. The FTC alleged that Air AI promised that Air AI would provide full refunds to customers who do not earn a certain amount—typically twice or three times their investment within a specified number of months—or were unsatisfied with the products for any other reason. When consumers ask for a refund, the defendants rarely honor their guarantee, often delaying and leaving consumers in the dark before cutting off communication altogether.

The Commission alleges the defendants engaged in various illegal activities, including:

• making false or unsubstantiated claims that people who purchase their services will or are likely to make substantial earnings;

• falsely claiming that purchasers of the Air AI Access Card or licenses are protected by a refund or buy-back guarantee;

• misrepresenting the performance, efficacy, nature, or central characteristics of their services, their refund policies, or the risk, earnings potential, or profitability of its services, in violation of the Telemarketing Sales Rule; and

• failing to provide consumers with required disclosure documents and earnings claims statements, making false claims about the profitability of the investment and their refund and cancellation policies, and failing to provide refunds when consumers met the refund policy requirements, in violation of the Business Opportunity Rule.

The FTC argued that the company’s actions violated Section 5(a) of the FTC Act, the Telemarketing Sales Rule (TSR), and the FTC’s Business Opportunity Rule. The agency asks the court to enter a permanent injunction to prevent future violations of the FTC Act, the TSR and the Business Opportunity Rule and to award monetary and other relief.

“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 FTC Bureau of Consumer Protection Director Christopher Mufarrige. “The FTC is focused on ensuring the promise of new technology isn’t misused as a means to mislead consumers.”

The Case is No. 2:25-cv-03068-SMB.

Judge: Brnovich, S.

Companies: Air AI Technologies Inc.

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