AI Income Scams: What Recent FTC Actions Show

DRAFT – not for publication

The U.S. Federal Trade Commission (FTC) has sued several online business schemes that used “AI-powered” language to sell the promise of passive income. The pattern in these cases is consistent: a big earnings promise, a large upfront payment, and an “AI” label that does little or nothing. This page summarizes what the FTC alleged, using only the FTC’s own published documents, and turns those allegations into checks you can apply yourself.

What the FTC is and why its cases matter here

The FTC is the U.S. federal agency that enforces consumer protection law, including rules against deceptive earnings claims. When the FTC files a complaint, it states that it has “reason to believe” the defendants are breaking or about to break the law. The court decides the case. Press releases and case pages on ftc.gov are therefore strong sources for what was alleged and ordered. They are not proof that every claim in the complaint is true.

We use these cases because they are public, dated, and specific. They show how AI income pitches are built, in a way that anonymous forum stories cannot.

Operation AI Comply (September 2024)

On September 25, 2024, the FTC announced five enforcement actions under the name Operation AI Comply. The FTC said the companies involved had “seized on the hype surrounding AI and are using it to lure consumers into bogus schemes”. Two of the five actions (DoNotPay and Rytr) were not about income claims. The three below were.

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Ascend Ecom

According to the FTC, Ascend Ecom promised that its “cutting edge” AI-powered tools would generate passive income through online storefronts. The complaint alleges the operation defrauded consumers of “at least $25 million.” It also alleges the company did not honor a “guaranteed buyback” and pressured consumers to change negative reviews. Status as of 2024-09-25: a federal court had temporarily halted the scheme and appointed a receiver.

Ecommerce Empire Builders

The FTC alleges that Ecommerce Empire Builders sold training programs costing “almost $2,000” and “done for you” storefronts costing tens of thousands of dollars, marketed as an “AI-powered Ecommerce Empire.” The FTC says the company claimed clients could make “$10,000 monthly” without evidence to support that claim. Status as of 2024-09-25: a federal court had temporarily halted the scheme and appointed a receiver.

FBA Machine (formerly Passive Scaling)

According to the FTC, this operation ran as Passive Scaling from 2021 and rebranded as FBA Machine in 2023, adding claims about “AI-powered” tools. The FTC says it cost consumers “more than $15.9 million” through deceptive earnings claims, including promises of a “7-figure business” and refund guarantees the FTC calls false. Status as of 2024-09-25: a federal court had temporarily halted the scheme and appointed a receiver.

Click Profit (2025)

What the FTC alleged

On 2025-03-18, the FTC announced that it had asked a federal court in the Southern District of Florida to halt Click Profit, which also operated under names including FBALaunch, PortfolioLaunch and Automation Industries. The court had granted a temporary restraining order on 2025-03-05. The FTC alleges the company promised “passive income” through “a proprietary system powered by artificial intelligence” for selling on Amazon, Walmart and TikTok.

According to the FTC’s press release:

• Ads allegedly promised six-to-eight-figure income from an online storefront and claimed such income could be guaranteed.
• Consumers allegedly paid a “management fee” of at least $45,000, plus thousands more for inventory.
• The FTC alleges that about 95% of the company’s Amazon stores were blocked, suspended, or terminated by Amazon.
• The company allegedly claimed affiliation with brands such as Nike and Disney.
• The company allegedly threatened customers who complained, citing a non-disparagement clause the FTC considers unlawful.

The release headline says the scheme “Has Cost Consumers At Least $14 Million.” The body text says consumers “have collectively lost millions of dollars.”

How the case ended

On August 25, 2025, the FTC announced stipulated final orders. According to the FTC:

• The defendants are permanently banned from “any involvement with the sales, marketing, or operations of any business opportunity”.
• The orders bar false earnings, affiliation and AI claims. The FTC said the defendants had “falsely claimed to use advanced artificial intelligence”.
• The orders include monetary judgments of $13.6 million and $7.3 million against different groups of defendants. These are partially suspended because of the defendants’ stated inability to pay. The full amount becomes due if they are found to have lied about their finances.

The FTC case page lists the case status as pending, last updated August 25, 2025.

The bigger picture: fraud reports overall

In March 2026 testimony to the Joint Economic Committee, the FTC said: “In 2025, the FTC received 3 million fraud reports from consumers, who reported $15.9 billion in losses.” That figure covers all fraud types, not only AI or income schemes, so it does not tell you how common AI income scams are. In a separate passage on its 40 enforcement actions in fiscal year 2025, the testimony names “business opportunities, investment or other money-making schemes” among the scheme types the FTC pursued.

Red flags that repeat across these cases

These are patterns in the FTC’s allegations. A pitch that shows one of them is not automatically a scam. A pitch that shows several deserves serious caution.

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1. Guaranteed or “passive” income. Click Profit allegedly promised “passive income”. The other storefront cases allegedly promised large or guaranteed earnings. The FTC’s job-scams guidance says an offer of large earnings in a short time with little work is “almost certainly a scam.”
2. Large upfront fees. Fees in these cases allegedly ran from about $2,000 for training to $45,000 or more for “done for you” stores.
3. An AI claim you cannot inspect. “AI-powered” was the selling point, yet the FTC alleged in the Click Profit case that the AI claims were false.
4. Borrowed credibility. Click Profit allegedly claimed ties to Nike and Disney.
5. Refund or buyback guarantees that are not honored. Alleged in Ascend Ecom and FBA Machine.
6. Pressure on reviews. Ascend Ecom allegedly pushed buyers to change negative reviews. Click Profit allegedly used a non-disparagement clause and lawsuit threats.
7. Success stories as proof. Click Profit allegedly promoted testimonials from customers who made large profits. A testimonial is not evidence of typical results.

How this connects to how we verify claims

The FTC asks whether an earnings claim is supported. We ask the same question about each public AI income claim we review. We grade every claim A, B, C or Rejected, based on the weakest link in the chain: the person, the income, and the AI’s actual role. Income that mainly comes from selling courses about “how to make money with AI” is grounds for rejection under our criteria.

According to the FTC, the U.S. Business Opportunity Rule “requires business opportunity sellers to give prospective buyers specific information to help them evaluate a business opportunity”. Whether a given AI program is covered by the rule is a legal question. We do not answer it for specific sellers.

Risks, limits, and pitfalls of this page

• Allegations are not findings. Most facts above come from complaints and press releases. Where a settlement exists, we say so.
• U.S. only. These are U.S. federal cases. Rules and enforcement differ in other countries.
• Not a complete list. We include only FTC documents we fetched and read for this article. Other relevant actions may exist.
• Names change. Several schemes operated under multiple brand names. A new name does not mean a new business.

What to do next

• Before paying for any AI income program, ask for written evidence of typical results, not top results.
• Search the seller’s name and every brand name it uses on ftc.gov.
• Do not sign agreements that stop you from posting honest reviews.
• Use our reader checklist for AI income claims before you pay for anything.
• If you think you have been scammed in the U.S., you can report it to the FTC.

Related reading

• How we verify AI income claims
• A reader checklist for any AI income claim
• Realistic AI side income models and pitfalls to avoid

Sources

All sources below were fetched on 2026-10-14. Quotes reflect the pages as they appeared on that date.

• “FTC Announces Crackdown on Deceptive AI Claims and Schemes,” Federal Trade Commission, 2024-09-25: https://www.ftc.gov/news-events/news/press-releases/2024/09/ftc-announces-crackdown-deceptive-ai-claims-schemes
• “FTC Acts to Stop ‘Click Profit’ Online Business Opportunity that Has Cost Consumers At Least $14 Million,” Federal Trade Commission, 2025-03-18: https://www.ftc.gov/news-events/news/press-releases/2025/03/ftc-acts-stop-click-profit-online-business-opportunity-has-cost-consumers-least-14-million
• “FTC Case Against E-Commerce Business Opportunity Scheme and its Operators Results in Permanent Ban from Industry,” Federal Trade Commission, 2025-08-25: https://www.ftc.gov/news-events/news/press-releases/2025/08/ftc-case-against-e-commerce-business-opportunity-scheme-its-operators-results-permanent-ban-industry
• “Click Profit, LLC” case page (FTC v. Click Profit, LLC, et al., 1:25-cv-20973-DSL), Federal Trade Commission: https://www.ftc.gov/legal-library/browse/cases-proceedings/click-profit-llc
• “FTC Testifies before the Joint Economic Committee on Agency’s Efforts to Combat Fraud,” Federal Trade Commission, 2026-03-25: https://www.ftc.gov/news-events/news/press-releases/2026/03/ftc-testifies-joint-economic-committee-agencys-efforts-combat-fraud
• “Job Scams,” FTC Consumer Advice: https://consumer.ftc.gov/articles/job-scams
• “Business Opportunity Rule,” Federal Trade Commission: https://www.ftc.gov/legal-library/browse/rules/business-opportunity-rule

Disclaimers

Not financial advice. Proof of AI Income provides information and analysis for educational purposes only. Nothing on this site is financial, investment, tax, or legal advice. Consult a qualified professional before making financial decisions.

Results vary. Income examples are not promises or predictions. Outcomes depend on skills, effort, market conditions, and many other factors. Most people will not achieve the results described in any single example.