The Federal Trade Commission (FTC) has filed a lawsuit in federal court seeking to halt Air AI from making allegedly deceptive claims about business growth, earnings potential, and refund guarantees. The agency alleges that the company targeted small businesses and entrepreneurs with false promises, resulting in some consumers losing up to $250,000 and being left in debt.
Christopher Mufarrige, Director of the FTC Bureau of Consumer Protection, stated: “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 complaint was filed against Delaware-based Air AI Technologies—also known as Air AI, Air.AI, or Scale 13—as well as its owners Caleb Matthew Maddix, Ryan Paul O’Donnell, Thomas Matthew Lancer, and five other companies. According to the FTC’s allegations, since at least February 2023 these defendants have marketed business coaching materials and services such as an “Air AI Access Card” alongside licenses for reselling their offerings.
Air AI advertised its main product as “conversational AI,” which it claimed could replace human customer service representatives while generating substantial profits for business owners. The FTC asserts that the company told customers they could earn back tens of thousands of dollars within days or months—or even millions over time—using its services.
Despite these assurances, the agency alleges most customers did not realize promised profits or recover their initial investments. Additionally, Air AI reportedly failed to honor refund guarantees provided to those who did not meet certain earnings thresholds or were dissatisfied for other reasons; instead, refund requests were often delayed or ignored entirely.
The FTC further claims that Air AI engaged in several unlawful practices including making unsubstantiated income claims; falsely promising buyers were protected by refund policies; misrepresenting key aspects of their products; violating the Telemarketing Sales Rule; failing to provide required disclosure documents; making misleading statements about profitability and cancellation policies; and refusing refunds even when conditions were met—all actions considered violations under relevant regulations such as the Business Opportunity Rule.
The Commission unanimously approved filing the complaint by a 3-0 vote. It was lodged in U.S. District Court for the District of Arizona against Air AI Technologies Inc., Apex Holdings Group LLC, Apex Scaling LLC, Apex 4 Kids LLC, New Life Capital LLC, Onyx Capital LLC—and individuals Maddix, O’Donnell and Lancer.
The FTC encourages consumers seeking information about fraud prevention or wishing to report scams to visit consumer.ftc.gov or ReportFraud.ftc.gov for resources.
