Today we provide an extensive overview of the challenge of AI hallucinations, which are defined as generated content that appears factual but is ungrounded. We detail the technical methods researchers are employing to improve factual accuracy, including Retrieval-Augmented Generation (RAG), fine-tuning using human feedback (RLHF), and clever prompting strategies like Chain-of-Thought. Furthermore we review prominent benchmarks (such as TruthfulQA and FActScore) used to quantitatively measure and track improvements in AI truthfulness. Furthermore, we addresses the complex and evolving global legal implications, highlighting how major jurisdictions (the EU, China, and the US) are introducing regulations to mandate transparency and accountability for AI-generated misinformation. Finally, we analyze the impact of factual errors on consumer trust and outline industry initiatives like Model Cards and source citation to restore confidence.