In a bid to enhance efficiency and cut costs, major corporations are increasingly deploying AI-driven chatbots for customer service despite concerns over costly errors and the need for clear guidelines on balancing AI suggestions with human judgment.
In 2022, customer Jake Moffatt contacted Air Canada to discuss the costs of a bereavement fare. According to The Guardian, the bot told Moffatt all he needed to do was fill out an online form within 90 days of the issued ticket so he could get a refund for his trip.
He went to a family member's funeral in Toronto. He followed the bot's directions only to discover this was untrue, and Air Canada doesn't apply bereavement fees after completing trips.
The inaccurate information prompted Moffatt to sue Air Canada. Canadian courts ruled in his favor, meaning that the airline must honor the arrangements made by its AI chatbot.
In their official report, the judge in Moffatt's case wrote, "Air Canada argues it cannot be held liable for information provided by one of its agents, servants, or representatives - including a chatbot. It does not explain why it believes that is the case. In effect, Air Canada suggests the chatbot is a separate legal entity that is responsible for its own actions. This is a remarkable submission. While a chatbot has an interactive component, it is still just a part of Air Canada's website. It should be obvious to Air Canada that it is responsible for all the information on its website. It makes no difference whether the information comes from a static page or a chatbot."
The Canaads case is one of the first in the world to hold a corporation liable for the actions of an AI chatbot, and it begs the question: what will other countries do in the future?
Canada's ruling promises that legal systems will hold AI assistants to the same standards as human staff, which bodes well for customers worldwide.
In the end, Moffatt received a $200 coupon for future trips, which Ruth Susswein, Director of Consumer Protection for San Francisco-based Consumer Action, found to be insufficient given the amount of money Moffatt spent on his ticket.
"It's good to know that Air Canada ultimately took responsibility for the information its chatbot imparted," she told Tech Times in an interview. "Companies must be accountable for the information that they instruct customers to follow. In future cases of AI mistakes and misdirection, we would hope that consumers would not have to sue companies to get the refunds they should be entitled to. Consumers need to be able to rely on the directions a company provides to successfully resolve disputes--even when they are provided by artificial intelligence."
Countries around the world are taking steps to regulate AI. According to The Washington Post, Brazil, China, Japan, and the European Union (among others) are discussing different degrees of regulation. So far, only China has explicitly stated that AI developers are directly responsible for the outcomes of their inventions.
Neighboring Japan, for example, has allowed AI to train itself using previously copyrighted data and is waiting to see how AI continues to develop before continuing to legislate.
Customers are left to their own devices if they receive inaccurate information. We don't know how the ruling on Air Canada's liability for its AI chatbot will affect consumer protection laws. However, there are still things concerned consumers can do to hold companies accountable in case they should deal with something similar
Taking screenshots of interactions with AI bots can help you make your case with companies that provide inaccurate information. If efforts to work directly with a company don't go well, you can use these screenshots to seek help from a third party.
If legal help is needed, consumer protection lawyers and nonprofits can represent you. Additionally, you can file a complaint with organizations such as the Consumer Financial Protection Bureau (CFPB) if you're from the U.S. In Canada, you can work with Consumer affairs.
About the author: Ingrid Cruz is a freelance writer covering e-commerce, pop culture, and our relationship to all things internet. You can follow her work and adventures on X (formerly Twitter) or Instagram at ingridquerubina.
