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Confuses the target. Pokemon protected by Magic Coat or the ability Magic Bounce are unaffected and instead redirect this move back to the user.
Confusion's unreliability as a pseudo-status effect is enough to avoid this attack. Factor in the fact that most of the move's recipients would rather be attacking their foes head-on and you'll see that there's very little reason to use this move.
Confuse Ray is a more accurate Ghost-type alternative.