Yes, Air Canada Must Pay A Partial Refund For Its Chatbot Error

Air Canada is financially responsible for a website chatbot error that misled a passenger, according to a recent ruling by a Canadian tribunal. Now the airline must partially refund the passenger for the ticket price.

Air Canada customer Jake Moffatt, who requested information about the airline's bereavement policy from its chatbot after his grandmother died in 2022, was informed that a reduced bereavement fare could be claimed retroactively for his flight from Vancouver to Toronto. 

But when he attempted to claim the refund, he was informed by an Air Canada employee that the airline does not, in fact, offer that service.

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A screenshot included in the February 14 decision from the Civil Resolution Tribunal of British Columbia detailed what the chatbot told him:

"If you need to travel immediately or have already travelled and would like to submit your ticket for a reduced bereavement rate, kindly do so within 90 days of the date your ticket was issued by completing our Ticket Refund Application form."

The airline claimed it was not responsible for discrepancies between its artificial intelligence (AI) entities and its actual policies, a notion that, according to tribunal member Christopher Rivers, is "remarkable."

"Air Canada argues it cannot be held liable for information provided by one of its agents, servants or representatives — including a chatbot," Rivers wrote in his decision. "It does not explain why it believes that is the case."

Rivers said the airline suggests that the chatbot is a separate legal entity that is responsible for its own actions. "This is a remarkable submission," he said. "While a chatbot has an interactive component, it is still just a part of Air Canada’s website. It should be obvious to Air Canada that it is responsible for all the information on its website. It makes no difference whether the information comes from a static page or a chatbot."

Moffatt is entitled to $812.02, according to the decision.

Air Canada did not immediately return a Kiplinger request for comment. According to a Vancouver Sun report on February 15, however, the airline said it would comply with the decision and had no further comment. 

Tough time for airlines 

This news comes during a time when airlines are being taken to task by both customers and employees over complaints about fairness.

In 2023, Spirit Airlines settled a class-action lawsuit brought by customers who were charged additional carry-on fees after booking through online travel agents to the tune of $8.25 million. 

American Airlines, which just raised checked baggage fees, was ordered to pay more than $4 million last year for illegally keeping passengers on the tarmac for hours at a time without giving them the option to deplane.

Airlines, like many businesses, have begun to rely increasingly on the use of AI to assist with customer service issues like the one in Moffatt's case. 

As of February 20 Air Canada did not appear to have a chatbot feature on its website.

In the U.S., the Department of Transportation (DOT) advises air travelers with complaints against an airline to give the airline a chance to resolve them by filing complaints directly with the airline, which is required to acknowledge complaints within 30 days of receiving them and to send written responses to the travelers within 60 days.

Those who believe their problem remains unresolved, however, can file their complaints with the DOT itself.

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