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Risks of company chatbots

In response to Brown's predicament, the Utah Division of Consumer Protection made it clear that a company can be held responsible for fulfilling a chatbot's promises.

"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 the 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 (AI) 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.

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How to protect your rights

If you find yourself in a similar situation to Brown, make sure you capture all the details. Take screenshots of the conversation, as the Air Canada passenger did in their case, so you have a record of the conversation. And be careful about what you say to the chatbot, because if you appear to have engaged in fraudulent or underhanded behavior, this behavior may be used against you.

Filing a complaint with your area's consumer protection agency may be a good first step toward a resolution.

Keep in mind that this is an evolving area of the law, and companies may not always want to follow through if a chatbot makes an agreement with you. While you may ultimately prevail, in some cases, you might have to take legal action to do it — and there are no guarantees the law will be in your favor. The technology is too new for there to be established precedent.

If you have an expensive disagreement with a company based on a chatbot’s commitment, contacting a lawyer with experience in this emerging tech may be your best bet. When the company sees you have legal support, the business may decide to settle the matter rather than risk a ruling that doesn't go their way.

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Christy Bieber Freelance Writer

Christy Bieber a freelance contributor to Moneywise, who has been writing professionally since 2008. She writes about everything related to money management and has been published by NY Post, Fox Business, USA Today, Forbes Advisor, Credible, Credit Karma, and more. She has a JD from UCLA School of Law and a BA in English Media and Communications from the University of Rochester.

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