Hallucination

Fabricated entities, invented numbers, overconfident inferences — and how to catch each type.

Mastery—
Quiz
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Exercises
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Challenge
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Why this matters

A in transcript analysis is any output content not supported by — or contradicting — what was said. It's dangerous because it's fluent: “customer works at Infosys” sounds as factual as “customer works at an IT company in Pune”.

Different hallucinations have different causes and different defences. A fabricated bank name needs a quote-existence check; “5 crore” instead of “50 lakh” needs deterministic number normalization; “will apply next month” from “might consider” needs an abstain option and entailment checks. Categorizing is the first step to preventing.

Core concept

Technical explanation + simple intuition + example

A taxonomy of transcript hallucinations

  • Fabricated entity: a name, bank or employer that was never said.
  • Unsupported claim: an extra fact with no basis ("already has a loan elsewhere").
  • Incorrect inference: a conclusion stronger than the evidence ("might" → "will").
  • Missing evidence: the cited support doesn't actually support (agent's leading question).
  • Contradiction: the transcript says the opposite (objection later resolved).
  • Numerical hallucination: wrong numbers or units (lakh/crore, 10× errors).

Supported, unsupported, contradicted, insufficient

Judge the answer against the transcript: - Supported — everything in the answer is backed. - Unsupported — it adds specifics that aren't there. - Contradicted — the transcript says otherwise. - Insufficient evidence — its conclusion goes beyond what the transcript establishes.

The 10 questions

Every important concept should answer all of these

1What is it?

Model output content that is not supported by the source transcript (or contradicts it).

2Why does it exist?

LLMs generate plausible continuations; plausibility isn't truth, especially under pressure to answer.

3What problem does it solve?

Detecting and preventing it keeps downstream decisions tied to what customers actually said.

4How does it work internally?

Prevention: abstain options, evidence requirements, low temperature, deterministic parsing. Detection: quote checks, verifiers, claim decomposition, ranges.

5What does it look like on real transcript data?

Indian number units (lakh/crore), vague employer mentions, third-party references and hedges are hallucination magnets.

6What can go wrong?

Verifiers that share the generator's blind spots, checks that only test existence (not entailment), and treating 'no hallucination detected' as 'correct'.

7How do I evaluate it?

Label a sample of outputs per claim (supported/unsupported/contradicted/insufficient), report rates by category and slice.

8When should I use it?

Always check for hallucination on customer-facing or decision-driving outputs.

9When should I NOT use it?

Don't rely on the generator to self-report hallucinations without verification.

10How does it affect downstream systems?

Hallucinated amounts misprice offers; fabricated employers corrupt eligibility; invented intent creates false leads.

Interactive lab: Hallucination spotting

Eleven model answers to real transcripts. Judge each as Supported / Unsupported / Contradicted / Insufficient Evidence, classify the hallucination type, then reveal the evidence.

PRECOMPUTED EXAMPLE
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Try it yourself

Conceptual (A), applied (B) and engineering (C) exercises

Q1Type B · AppliedBeginner
Model output: “Customer works at Infosys in Pune.” Which hallucination type?
1AgentAre you salaried or self-employed?
2CustomerSalaried, I work at an IT company in Pune.
Q2Type B · AppliedIntermediate
Output: “amount: 5 crore”. Verdict and type?
1Agentsir loan amount kitna chahiye
2Customerpachas... fifty lakh approx, 50 L
Q3Type C · EngineeringAdvanced
Map each hallucination type to one concrete defence: fabricated entity, numerical, incorrect inference, missing evidence.

Graded by a transparent keyword rubric (not an LLM) — it checks for the key ideas, then shows a model answer for self-assessment.

Q4Type A · ConceptualIntermediate
Why do LLMs produce fluent fabrications, like a specific employer name that was never mentioned?

Real-world application

An auto-generated CRM note said “Customer employed at TCS, salary 12 LPA”. The call only said “IT company” and never mentioned salary. The note was used for eligibility pre-checks. After an audit found 7% of notes contained fabricated specifics, the team switched to extracting fields with verbatim evidence spans, rejected any field whose evidence didn't contain the value, and let employer be null when unspecified.

Common mistakes

Letting the model fill every field

Pressure to fill → plausible fabrication.

Fix: Allow null / insufficient evidence explicitly.

Checking quote existence only

A real quote can still fail to support the claim.

Fix: Add entailment verification per claim.

Trusting numbers the model normalized itself

Unit errors (lakh/crore) are common.

Fix: Extract the span; normalize numbers deterministically in code.

Engineering decision

Where do you invest in hallucination defence?

Use it when
  • Fields that drive money or compliance (amounts, rates, consent)
  • Free-text notes that humans will trust
  • Outputs shown to customers
Avoid it when
  • Don't build heavy verifiers for low-stakes aggregate analytics — sample-audit instead
Trade-offs
Verification stage vs Latency & cost
A verifier call adds cost; deterministic checks first catch much for free.
Abstention vs Coverage
Allowing null reduces hallucination but lowers fill rate; that's usually the right trade.

Quiz

Pass mark 60%. Missed questions go to your mistake log and spaced review.

0/5 answered
Q1Beginner
“The customer will apply next month” from “I might consider it next month” is…
Q2Intermediate
Which prevention step most directly reduces 'forced guess' hallucinations?
Q3Intermediate
An evidence quote exists verbatim in the transcript. Is the claim therefore supported?
Q4Intermediate
Which are hallucinations relative to the transcript? (Select all)
Select all that apply.
Q5Advanced
Why decompose a long answer into atomic claims before verification?

Advanced challenge

Type B · AppliedAdvanced
An audit samples 400 outputs: 18 contain a fabricated entity, 9 a numerical hallucination, 25 an incorrect inference (some outputs have several types; 44 outputs have at least one). What is the output-level hallucination rate in percent?
%
Key terms in this lesson