The encyclopedia · Marketing & Brand · Marketing decision · 2024
Air Canada's chatbot invented a bereavement-fare policy the airline had to honour
The airline's chatbot said a passenger could claim a retroactive bereavement discount; a tribunal ruled Air Canada liable.
Air Canada · 2024-02-14
What happened
Air Canada is Canada's largest airline. In November 2022, a passenger named Jake Moffatt used the airline's website chatbot to ask about bereavement fares after his grandmother died.
The chatbot told him he could buy a full-price ticket and apply for a retroactive bereavement discount within 90 days. Moffatt followed the advice, booked the flights, and later submitted a refund request. Air Canada denied it, explaining that its real policy required advance approval and that the chatbot was wrong.
In February 2024, the British Columbia Civil Resolution Tribunal rejected Air Canada's argument that the chatbot was a separate legal entity. It found the airline negligent and ordered it to pay damages and tribunal fees totalling about CAD 812.
Why it happened
- The chatbot was deployed without being grounded in the airline's actual fare rules, so it could invent policy on demand.
- Air Canada treated the chatbot as a separate channel rather than as part of its website, which the tribunal rejected.
- No human-in-the-loop or verification step caught the false bereavement advice before the customer relied on it.
- The airline's public defence made the error look worse by appearing to dodge responsibility for its own system.
The lesson
A customer-facing AI is not a separate legal entity; whatever it promises on your website becomes your promise, so it must be grounded in real policy.
Aftermath
Air Canada paid the award and the ruling became a widely cited precedent on corporate liability for AI-generated customer service answers.
Sources
- Recent Developments That Could Impact How Companies Offer AI-Based Customer Service Chatbots — Skadden
- Air Canada Has to Honor a Refund Policy Its Chatbot Made Up — WIRED
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