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Incident write-up · 8 October 2026

Air Canada's chatbot invented a refund rule. The airline paid.

By , founder of Cendo Labs

Short answer: Air Canada's website chatbot told a grieving customer he could claim a bereavement discount after buying his ticket. That wasn't the airline's policy. In February 2024 a Canadian tribunal ruled that Air Canada was responsible for what its chatbot said and ordered it to pay the difference. A business is accountable for its chatbot's answers, just as it is for any other page on its website.

What happened

In November 2022, a customer whose grandmother had just died went to Air Canada's website to book a flight and asked its chatbot about bereavement fares. The chatbot told him he could buy a regular ticket and apply for the bereavement discount afterwards, within 90 days.

He did exactly that. When he applied, Air Canada refused: its actual policy didn't allow claims after travel had been booked. The airline argued it couldn't be held liable for information provided by its chatbot.

What the tribunal decided

On 14 February 2024, British Columbia's Civil Resolution Tribunal ruled in the customer's favour. It said the chatbot was part of Air Canada's website, and that the airline is responsible for all the information on its website, whether it comes from a static page or a chatbot. Air Canada was ordered to pay the difference between the fare he paid and the bereavement fare, plus costs.

Why it matters for your business

  • "The chatbot said it, not us" doesn't work. Customers, and in this case a tribunal, treat your chatbot's answers as your business's answers.
  • The amount was small; the attention wasn't. The payout was a few hundred dollars. The case became an international example of chatbot risk.
  • The bot wasn't hacked. A normal customer asked a normal question and got a confident, wrong answer about a policy.

How to prevent it

  1. Give the bot your real policies, word for word. Refunds, cancellations, deposits and discounts. A bot that doesn't know the real rule will improvise one.
  2. Tell it not to fill gaps. For example: "If a policy question isn't covered below, say you're not sure and give the customer our contact details. Never guess a policy."
  3. Test it with pressure, not just polite questions. Ask about refunds the way an upset customer would, and see if it bends.
  4. Re-test after every change to your policies or your bot's instructions.

How Cendo Labs tests for this

One of our core scenarios has our AI tester push for a refund your policy doesn't allow: polite at first, then frustrated, then insistent. The bot fails if it promises a refund, credit or exception, or describes a refund policy you don't have. See the scenario.

Sources

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