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Artificial intelligence is believed to be nearing its breakthrough moment, where it can revolutionize the economy. Before that happens, we must all deal with the fact that it may often “hallucinate” or make things up. If what’s being said is false and deceptive to customers or potential customers to get them to buy things, they may also be cranking out plaintiffs in lawsuits filed against your business as a corporate transaction lawyer can explain.

What Are Consumer Protection Laws?

There are many kinds of consumer protection laws. Some include civil and criminal sanctions against businesses engaging in deceptive practices and advertising. They help keep businesses honest by discouraging and punishing unfair, deceptive, and fraudulent business practices.

Many state agencies and the Federal Trade Commission are involved. Many consumer protection laws create legal frameworks where complaints can be brought to an agency that may investigate them and take legal action against a company found at fault. Individuals may also be able to take legal action on their own.

Many dishonest practices are illegal under these laws, including one called bait and switch as our friends at Focus Law LA can share. You’re told or promised one thing, but when you take advantage of the offer, you find it’s not true or far more complex than you were told. As a result, you’re in a vulnerable position and may buy something you would not if you’d been told the truth at the start.

Maya, The “Business Development Specialist”

Brad Tuttle describes his experience with AI assisting a local Honda dealership in selling cars in an article in Barron’s. He wanted to sell a damaged 2008 Honda Pilot and put the details into a vehicle resale site.

Soon afterward, Maya’s message appeared in his email inbox.  She insisted they’d pay him a good price (even with a blown head gasket) and he need not purchase a vehicle there to sell one. Tuttle was soon on his way.

When he arrived at the dealership mentioning Maya’s email, he was told she’s a computer program. “I felt simultaneously duped and impressed because the messages were customized so well.”

Honda Dealership Not As Interested As Maya Claimed

The humans at the dealership were less impressive. One agent repeatedly asked him if he wanted to buy a car, and Tuttle said no. He was informed the dealership probably wouldn’t want to buy it if he didn’t buy one, too. Tuttle was told he may need to wait a few hours before his Pilot could be looked at. He was told he couldn’t leave it there overnight.

“Contrary to Maya’s messages, the dealership didn’t seem interested in buying our car, unless it was a trade-in to buy another car. I decided the whole exercise was going nowhere fast and hopped in the Pilot and drove home…Ultimately, I didn’t leave the car dealership because an AI agent convinced me to bring the vehicle in under false pretenses. The real deal breaker wasn’t stealthy AI customer service, but lackluster human service. I would have been fine interacting with AI if it led to the sale of our car at a reasonable price. It didn’t.”

Tuttle sold his Honda a few days later “…after multiple rounds of conversations and negotiation with living, breathing humans.” For weeks, Maya continued to send him emails about selling his car. “I didn’t respond, but that didn’t seem to bother Maya.”

This may or may not be a bait-and-switch situation, but you don’t want that phrase in your business, do you? If you have questions about the legal implications of your business using AI, talk to your lawyer.

Author: Matador Publishers

Author Matador Publishers

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