Air Canada to compensate costumer misled by chatbot

Air Canada has been ordered to compensate a customer after its chatbot provided inaccurate information, leading the customer to purchase a full-price ticket. This case, the first of its kind in Canada, raises concerns about the oversight companies have over their chatbot tools, especially amid a broader trend of automating services.

In 2022, Jake Moffatt contacted Air Canada to inquire about the documents needed for a bereavement fare and the possibility of retroactive refunds. The chatbot provided information that led Moffatt to believe he could apply for a refund within 90 days of ticket issuance. Moffatt subsequently booked tickets for travel but was later denied a refund, with Air Canada stating that bereavement rates did not apply to completed travel.

Air Canada admitted that the chatbot had used “misleading words” in its advice and promised to update the chatbot. Moffatt then sued for the fare difference, prompting Air Canada to present a unique defense. The airline argued that the chatbot was a “separate legal entity” responsible for its actions, despite being part of Air Canada’s website.

The tribunal member, Christopher Rivers, rejected Air Canada’s argument, stating that, regardless of the interactive component, the chatbot was still part of Air Canada’s website, and the company was responsible for the information provided. Rivers highlighted that Air Canada failed to explain why its webpage was inherently more trustworthy than the chatbot. As a result, Air Canada has been ordered to pay Moffatt the fare difference, pre-judgment interest, and fees.

This case emphasizes the importance of companies taking responsibility for the accuracy of information provided by their chatbots and other automated tools, particularly as automation becomes more prevalent in customer service and interactions.

The ruling underscores the accountability companies bear for the accuracy of information disseminated through their automated systems, as the use of chatbots and automation becomes increasingly common in customer interactions. The incident raises questions about the need for robust oversight, quality assurance, and transparency in deploying automated tools to ensure they align with legal and ethical standards.

Air Canada’s attempt to distance itself from the chatbot’s actions by considering it a “separate legal entity” faced strong rejection. The tribunal member emphasized that, irrespective of the interactive nature of the chatbot, it remains an integral part of Air Canada’s website, and therefore, the airline is ultimately responsible for the information it provides.

This case highlights the potential risks and legal implications for companies that deploy automated systems without adequate safeguards. As technology continues to play a significant role in customer interactions, companies must prioritize the accuracy, reliability, and ethical use of automated tools to maintain customer trust and avoid legal repercussions.

The ruling serves as a precedent in Canada, signaling to companies that they cannot absolve themselves of responsibility for the actions and information provided by their automated systems. As regulatory frameworks evolve, companies will likely face increasing scrutiny to ensure the responsible deployment of AI, chatbots, and other automated technologies.

Air Canada’s obligation to compensate the customer for the fare difference, pre-judgment interest, and fees reinforces the principle that companies must rectify the consequences of misinformation caused by their automated tools. Moving forward, this case may prompt organizations to reassess their practices, implement stringent quality control measures, and enhance transparency in deploying and maintaining automated systems to mitigate the potential risks associated with misinformation and customer grievances.

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