the ftc has filed thirteen cases over what companies called ai. the enforcement lands about two years after your money did.

ai-washing is now an enforcement category, with thirteen federal actions since 2024 over claims about what a product could actually do. the one worth reading is air ai, banned this march from marketing business opportunities after selling small businesses an ai phone agent at $25,000 to $100,000 upfront, with the complaint describing software that was glitchy or not consistently available and buyer losses reaching $250,000. notice the structure, because it repeats far below the level that gets a press release: the capability lives in the demo and the deck, the money is due before anything runs, and the contract you sign describes a license to software rather than a job the software does. the cost is not only the check. it is the quarter you spent staffing around a capability that never arrived, and the credibility you spent internally telling everyone it would.

the fake protection is due diligence theater: asking the vendor whether the ai is real, sitting through a longer demo, reading a security whitepaper written by the same marketing team.

do the version that holds: make them write into the contract the specific task the system performs without a human, pay monthly against it rather than upfront, and put in a thirty day exit if the task is not being performed. a vendor selling capability will sign that. one selling a category name will explain why their pricing model does not allow it, at length.