In short: AI scams don't usually involve fake AI. They involve real excitement used to sell empty promises. Plenty of AI tools are useful, and I use them. The problem is products and pitches that use the word "AI" with nothing behind it. This Q&A covers how that hype works, what regulators have said, and a five-question test you can run on any AI-powered claim.
Isn't AI just the latest buzzword?
The technology is real. The buzzword is a separate problem. I remember when every course online was a dropshipping course. Now a lot of those same people are teaching AI. They moved on to the next thing.
There are great teachers out there, don't get me wrong. But a lot of companies are just using the terminology. It sounds interesting, they build up the value, and at the end of the day they deliver nothing. That's the pattern to watch for.
Are regulators doing anything about it?
Yes. In 2023, the FTC published business guidance warning companies to keep their AI claims in check. It asked whether companies were exaggerating what their AI products can do, promising that an AI product does something better than a non-AI one without proof, or claiming to use AI when they don't (FTC).
In September 2024, the FTC announced Operation AI Comply, a set of law enforcement actions against companies it said used AI hype or sold AI technology in deceptive ways (FTC). One case involved DoNotPay, which the FTC said had promoted its service as "the world's first robot lawyer" without the evidence to back that up.
The point isn't that AI is risky. It's that the same truth-in-advertising rules apply to AI claims as to any other claim.
How do scammers use AI in investment pitches?
Investor.gov warns that fraudsters often pitch investments tied to the latest trend or technology to make their offers sound exciting and new (Investor.gov). AI is the current version. You'll see pitches for "AI trading bots" that promise guaranteed returns, or "AI-powered" funds with no explanation of what the AI actually does.
The five-question AI-claims test
Run any AI product, course or investment pitch through these five questions.
| # | Question | Good sign | Warning sign |
|---|---|---|---|
| 1 | What exactly does the AI do? | A specific task you can describe in one sentence | "It's powered by AI" with no detail |
| 2 | Can I see it work before I pay? | Free trial, live demo or sample output | Only testimonials and screenshots |
| 3 | What happens without the AI? | Clear explanation of the improvement | No comparison at all |
| 4 | Who is responsible for the results? | Named company, clear terms, support contact | Vague ownership and no way to reach anyone |
| 5 | Are the results promised or estimated? | Ranges, assumptions and caveats | Guaranteed income or returns |
If a pitch fails two or more of these, slow down.
Does that mean AI tools for business are a scam?
No, and I want to be clear about this. A lot of AI tools make real work faster: writing product descriptions, analyzing sales data, answering customer questions, forecasting inventory and building online stores. Legit AI tools tell you what they do and let you see them work. The scam isn't AI. The scam is a claim with nothing behind it.
Which businesses are safest from AI?
▶ Watch: Watch: Robert Nikic on the businesses AI can't replace
Some work is clearly changing. Call centers, for example, are feeling it as AI takes over more routine conversations. But I always tell people to look at home services too. I don't see AI fixing your toilet anytime soon. Plumbing, electrical work, HVAC and other hands-on trades are still built on skilled people in a physical place.
The lesson isn't to fear AI. It's to be realistic about what it does well and what it doesn't. That same realism protects you from scams.
What should I do if I think I've been scammed by an AI offer?
- Stop any further payments.
- Contact your bank or card issuer about disputing charges.
- Save all emails, ads, contracts and receipts.
- Report it at ReportFraud.ftc.gov.
- For investment-related fraud, you can also submit a tip to the SEC through Investor.gov.
▸ Where I stand on AI and small businesses
In my advisory work on SDG 8 & 9, I'm optimistic about AI. Used well, it lowers the cost of starting and running a small business, which supports SDG target 9.3 on expanding small enterprises' access to financial services and markets (UN). That's exactly why hype bothers me. Every time someone loses money on an empty AI promise, it makes them less willing to try the tools that could help. Clear claims protect buyers, and they also protect the honest builders.
FAQ: AI scams
What is an AI scam?
An offer that uses the excitement around AI to sell something that doesn't do what it promises, or promises guaranteed income or returns.
What is "AI washing"?
Claiming a product uses AI, or exaggerating what its AI does, to make it look more advanced than it is.
How do I know if an AI tool is legit?
Ask exactly what the AI does, test it before paying, and check who's responsible for it. Be cautious with guaranteed results.
Has the FTC taken action on AI claims?
Yes. The FTC announced Operation AI Comply in September 2024, targeting companies it said used AI claims deceptively.
AI is a tool. "AI" alone is not a product.
What is Robert Nikic's view on AI scams?
Robert Nikic's view is that AI itself is useful and legitimate, but the buzzword attracts people who sell value they never deliver. He recommends testing every AI claim: what it does, whether you can see it work and whether results are promised or estimated.
Related reading: Robert Nikic on Business Scams: 7 Questions to Ask First · Robert Nikic on Income Fraud · Robert Nikic: Legit or Scam? The Office Test
