Air Canada Fined for Misleading Chatbot Information in Landmark Case

In a groundbreaking decision, Air Canada has been mandated to compensate a customer due to misleading information provided by its chatbot, marking a first-of-its-kind ruling in Canada. The incident sheds light on the growing concerns over automated customer service tools and their oversight by companies.

The controversy began when Jake Moffatt, a British Columbia resident, sought information from Air Canada regarding necessary documents for a bereavement fare and the possibility of retroactive refunds. Moffatt’s interaction with the airline’s chatbot led him to purchase a full-price ticket under the impression he could apply for a refund within 90 days after the ticket issuance, as advised by the bot.

However, upon attempting to secure the refund after his travel, Air Canada informed Moffatt that bereavement rates were not applicable to completed trips, contradicting the chatbot’s guidance and referring Moffatt to the bereavement section on their website for accurate information.

The situation escalated when Air Canada, in response to Moffatt’s legal action for the fare difference, astonishingly claimed the chatbot operated as a “separate legal entity” responsible for its actions. This defense was unequivocally rejected by tribunal member Christopher Rivers, who stated, “It should be obvious to Air Canada that it is responsible for all the information on its website,” emphasizing the irrelevance of whether the information was delivered via a chatbot or a static webpage.

Rivers further criticized the airline for not clarifying why the ‘Bereavement Travel’ webpage should be considered more reliable than the chatbot’s advice. He underscored the unreasonable expectation for customers to discern the accuracy of different sections of Air Canada’s website.

As a result of the tribunal’s findings, Air Canada has been ordered to pay Moffatt C$650.88, the difference between the full fare and the bereavement fare he was initially led to believe he could claim, in addition to C$36.14 in pre-judgment interest and C$125 in fees.

This case highlights the critical need for stringent oversight and accountability in the deployment of automated customer service technologies, as companies continue to navigate the balance between innovation and reliability in customer interactions.