'How's that my fault?': Home warranty company refused to pay Utah man $3,000 he says was promised by its 'miscommunicating' AI chatbot to replace his faulty A/C unit — what are your rights?

Brown went online and was connected to the warranty company's chatbot, where he explained what had occurred.

"Can I just get the maximum payout of $3000.00?" he asked, according to KSL News in a story broadcast Sept. 23. "I will order and get it installed myself."

The chatbot agreed, per KSL News, stating: "We will proceed with the payout option of $3,000.00 as per your request.”

Brown says he was assured several times that the money was on its way. But when he called the company after the payment didn't come, he says the business told him the chatbot was "miscommunicating" with customers and they refused to pay.

"I said, 'How's that my fault?'" Brown recounted.

Brown then contacted KSL News, which called the Utah Division of Consumer Protection.

Here's what happened next, along with details on the responsibilities of companies and their chatbots.

Risks of company chatbots

In response to Brown's predicament, the Utah Division of Consumer Protection made it clear that a company can't simply ignore agreements made by their AI software.

"A company is ultimately responsible for the things their representatives are saying," Katie Hass, the division’s director, told KSL News. “A robot can be a representative of a company.”

This type of scenario has played out before elsewhere. In February, Air Canada was ordered to compensate a grieving passenger who claimed in 2022 its chatbot misled them into purchasing tickets at full price up front instead of at the bereavement rate. Upon returning from their grandmother's funeral, the passenger was denied a refund they say the bot told them was available.

The Canadian airline argued, per tribunal member Christopher C. Rivers, that the online tool was "a separate legal entity that is responsible for its own actions" and pointed out that it had an accurate version of its bereavement travel policy on its website, which doesn't allow for refunds after travel is complete. Still, the tribunal wasn't moved, and the airline was said to be responsible for all information on its site, even if a robot had provided it.

While the U.S. courts don't appear to have ruled on a similar case, the Federal Trade Commission and Consumer Financial Protection Bureau in June both issued warnings to businesses about the use of chatbots. Companies must realize the risks when using artificial intelligence when interacting with the public.

As for Brown, in the end, KSL News reports he got his $3,000 after the local broadcaster contacted the home warranty company. The company did not immediately respond to a request for comment.