AI Business Scams--A Warning from BBB of the Tri-Counties

A Podcast by BBB of the Tri-Counties

A BIG Thank you to Ayers Auto Repair in Santa Barbara for supporting this podcast!

Welcome to this week’s edition of Your Moment of Trust! Artificial intelligence (AI) is the hot new thing. It’s revolutionizing medical research, challenging the art world, and even helping small business owners streamline and automate tasks. But as with anything new and popular, scammers are quick to take advantage. When evaluating AI products for your business, be on the lookout for scams. 

How the scam works 

You get an unsolicited call, email, or text message claiming to offer AI services for small businesses. You may even stumble across a convincing looking ad on social media or be sent one by a friend. The services sound amazing. You’ll pay a reasonable amount upfront, and once the AI is set up, you can expect incredible benefits, such as automating all your marketing needs. If the ROI sounds too good to be true, that’s because it is. 

One small business owner reported signing up for a “free” trial of what appeared to be a promising new AI product. They lamented, “The company charged me $144 plus $12 ‘processing fee’ before the free trial was up… When I explained the situation over email… the 'Sr Success Manager' denied a refund and would not put me in contact with anyone else at the company. I informed him that the company was partaking in misleading and false advertisement, and he failed to respond to my email.” 

If you engage with scammers offering phony AI services, you’ll likely lose any money you pay them. At the very least, your business information could fall into the hands of unscrupulous individuals and put you at risk for identity theft, business email compromise, and other cons. 

How to avoid AI scams 

● Research before you hire. Get to know a company before you do business with them. This requires thorough research. Review their website and social media accounts. If anything looks unprofessional or if contact information is missing or doesn’t work, steer clear. Do an internet search for reviews and complaints. Search the company name along with the word “scam” to find reports or any dishonest business practices. You can also look up companies at BBB.org. 

● Understand the AI services you need. Don’t let someone you’ve never met sell you on a service you’ve never heard of before. AI technology is relatively new, so you’ll need to do some research to understand how it works and exactly how it can benefit your business. It’s best practice to first have a use for AI clearly in

mind, and only then reach out to reputable companies for the service. 

● Watch out for aggressive sales tactics and far-fetched promises. These are two of scammers’ most effective tactics. If someone pressures you to buy a service, telling you you’ll miss out if you don’t act right now, or if they promise you your business will make hundreds or thousands of dollars with little to no effort on your part, it’s probably a scam. 

● Ask for references. If a company reaches out to you, ask them for references and contact them. Look up the references online to make sure they are real people, with real businesses. If you can’t find their information, or if the service provider refuses to give you references, find another company to work with. 

● Safeguard your money and personal details. Never enter your sensitive personal information on a website you aren’t familiar with. Don’t send your details via email to someone you don’t know. Keep your money safe by refusing to send funds via wire transfer or prepaid debit cards. If you do purchase a service online, only use your credit card. Credit cards offer extra protection against fraudulent charges. 

For more information 

Discover a similar scam offering fake marketing services to small business owners. Learn more about AI in the BBB Business Tip: AI for small business. Where to start? Then, visit the BBB small business page to get the latest news and tips for small business owners. 

See BBB's artificial intelligence HQ for more AI tips and resources. 

If you’ve been targeted by an AI scam, report it at BBB.org/ScamTracker – even if you didn’t lose any money. Your report helps build awareness about common scam tactics so other business owners can spot a scam before it’s too late. 

Until next time!