What is Hallucination?

A hallucination is an output from an AI model that is fluent and confident but factually wrong or invented, such as a price, policy or date that does not exist. Language models generate plausible text, and when they lack the information they may fill the gap rather than admit it. On a phone call this is more dangerous than in a chat window: the customer cannot scroll back, and a spoken answer sounds authoritative. Common triggers are questions outside the knowledge base, vague instructions and prompts that pressure the agent to always have an answer.

A hallucinated discount or interest rate can create a commitment the business is pressed to honour, or a complaint, and in sectors regulated by RBI or IRDAI a mis-selling concern. The defence is operational: tight instructions, accurate knowledge and regular transcript review. Outpero records and transcribes every call, so a wrong answer can be found and the instructions corrected.