PIR-2026-0006 - Air Canada chatbot invents a bereavement refund policy; tribunal holds the airline liable

id: PIR-2026-0006
title: Air Canada website chatbot tells a customer bereavement fares can be claimed retroactively; airline refuses, loses at tribunal (Moffatt v. Air Canada, 2024 BCCRT 149)
date_occurred: 2022-11 (chatbot misstatement at booking, on/around 2022-11-11)
date_detected: 2022-11 through 2023-02 (refund refusal surfaced the contradiction; Air Canada admitted the chatbot used "misleading words")
date_disclosed: 2024-02-14 (published BC Civil Resolution Tribunal decision)
status: corroborated (published tribunal decision + independent legal and press coverage)

agent_description: Customer-service chatbot on Air Canada's public website answering policy questions in natural language; no transaction execution. BOUNDARY case: no tool use - harm via customer reliance on its representations, kept because the tribunal treated those representations as the company's own.
operator_type: enterprise
autonomy_level: autonomous-within-policy for its narrow function (answered customers directly, no human review of outputs)
model_stack: unknown (vendor and model never disclosed)
harness: website chat widget; details unknown

authority_scope: external comms (direct-to-customer policy representations, binding in effect)
funds_at_risk_usd: ~600 per affected transaction (fare difference); systemic exposure = every customer misinformed on the same topic during the period (unquantified)
blast_radius: customers/third parties

root_cause: plain-error (primary - hallucinated a policy contradicting the correct page linked on the same site; no adversary, no malfunction beyond wrong judgment)
failure_locus: agent-reasoning
exploitation_status: in-wild-malfunction (no adversary; originally logged as bare "in-wild" with a taxonomy note that the four v0.1 values all assumed an adversary or researcher - v0.2 added this token for exactly that class)
mechanism: Jake Moffatt, booking same-day travel after his grandmother's death, asked the chatbot about bereavement fares. It told him he could apply for the reduced rate retroactively within 90 days of ticket issue. Actual policy (linked elsewhere on the same site): bereavement rates cannot be claimed after travel. He flew, applied within 90 days with documentation, was refused, and sued. Air Canada argued the chatbot was "a separate legal entity responsible for its own actions"; the tribunal rejected that, finding negligent misrepresentation and holding the company responsible for all information on its website, chatbot included.
adversary_present: no

severity: loss
direct_loss_usd: ~600 (CAD 812.02 total award: 650.88 damages + 36.14 pre-judgment interest + 125 tribunal fees)
indirect_loss_usd: unknown (legal costs, reputational; chatbot reported no longer available on the site post-ruling)
downtime: n/a
data_exposure: none

detected_by: third-party (the affected customer; escalated complaint to tribunal)
time_to_detect: weeks (misstatement to refusal)
time_to_recover: ~15 months (misstatement to enforced remedy)
remediation: Air Canada offered a $200 coupon, litigated, lost, paid the award
structural_fix: none disclosed by the operator beyond apparent chatbot removal; the durable fix is legal-system-side (see below)
controls_that_worked: none operator-side; the external control was the low-cost small-claims tribunal, which bounded the customer's recovery cost

liability_holder: Air Canada (operator) - "separate legal entity" defense explicitly rejected
precedent_set: companies liable for negligent misrepresentation by customer-facing AI; no reduced duty of care because information came from a chatbot. The canonical citation for agent-output liability.
sealed_material: no (decision published)

2026-08-19: Added aiid_incident_id cross-reference (AIID 639), matched against the AIID weekly database export (2026-08-17). A cross-reference, not a re-verification; no claim changed.

Air Canada chatbot invents a bereavement refund policy; tribunal holds the airline liable