NIST uses the term confabulation for this risk in its Generative AI Profile.
On the phone, a hallucination can mean a caller is given a wrong price, a promise you never made, or wrong medical or legal information. Restricting the agent to an approved knowledge base and defining what it must not answer reduces the risk.
Test it: ask questions your knowledge base does not cover and check whether the agent says it does not know and offers a callback.
As of November 11, 2026. General information, not legal advice.