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Air Canada chatbot creates bogus refund policy, court says ‘pay up’ nonetheless

After a protracted legal battle, a civil court has ruled against Air Canada, mandating the airline to refund a customer who received incorrect information from an AI chatbot on the company’s website. The court dismissed Air Canada’s argument that the chatbot operated as a separate legal entity, holding the airline responsible for its actions.

The petitioner, Jake Moffat, sought clarification on Air Canada’s bereavement rates via the website’s chatbot immediately after his grandmother’s passing. The chatbot misinformed Moffat, directing him to book a flight and request a refund within 90 days—a procedure contrary to the airline’s bereavement policy, which does not permit refunds for completed travel.

Despite following the chatbot’s guidance and undertaking the flight, Moffat’s subsequent refund request was denied by Air Canada. The company contended that the chatbot’s response contained a link to the policy, implying Moffat should have been aware of the limitations on requesting bereavement rates post-travel. Moffat, unable to secure a refund after persistent efforts, escalated the issue by filing a complaint with Canada’s Civil Resolution Tribunal.

During the proceedings, Air Canada asserted that the chatbot was a distinct legal entity accountable for its actions. However, the tribunal refuted this argument, emphasizing Air Canada’s overarching responsibility for all information presented on its website, regardless of its source.

The tribunal’s ruling marks a precedent-setting case in Canada, signifying the first legal challenge involving AI-powered chatbots. The outcome of this landmark case could potentially influence future litigation involving similar technologies employed by other companies, according to reports by Mashable.

As AI-driven interactions become increasingly prevalent in customer service and online platforms, this ruling underscores the importance of accountability and transparency in businesses’ deployment of such technologies.

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