Major Airline AI Chatbots Provide Incorrect Refund and Rebooking Information, Following Air Canada Precedent

In January 2025, AI customer service chatbots deployed by United Airlines, Delta Air Lines, and American Airlines began providing systematically incorrect information about passenger refund rights, rebooking policies, and compensation eligibility under Department of Transportation regulations. The incidents came to light when passengers who relied on chatbot guidance found their refund claims denied and were forced to pay additional rebooking fees that should have been waived under DOT rules. The most significant cases involved passengers whose flights were cancelled due to airline operational issues. The AI chatbots incorrectly informed customers that they were only eligible for travel vouchers rather than full cash refunds, directly contradicting DOT regulations that mandate cash refunds for airline-caused cancellations. Additionally, the bots provided incorrect information about rebooking deadlines, compensation amounts, and passenger rights during extended delays. Following the 2023 Air Canada chatbot case where a tribunal ruled that airlines are bound by their chatbot's promises, consumer advocacy groups and law firms quickly mobilized. Class-action lawsuits were filed against all three carriers by February 2025, with plaintiffs arguing that the airlines are legally bound by the incorrect information provided by their AI systems. The lawsuits estimate that over 25,000 passengers were affected, with individual damages ranging from $200 to $3,000 per passenger. The Department of Transportation launched a formal investigation in February 2025, examining whether the airlines' use of AI chatbots violated consumer protection regulations. DOT officials indicated they would review whether airlines have adequate oversight mechanisms for AI-generated customer communications and whether new regulations are needed to govern AI deployment in customer service roles. The investigation is ongoing, with potential enforcement actions and fines pending.