CareCredit - Women's Health April 2024

Retailer AI Chatbots Accused of Illegal Wiretapping

There’s a new legal question about artificial intelligence (AI) at the center of a recent federal lawsuit.

Can AI engage in illegal wiretapping? The class-action suit, at the center of a report Sunday (Dec. 3) by CNBC, accuses Old Navy’s chatbot of that exact crime by logging, recording and storing conversation.

The lawsuit, filed in the Central District of California, claims that the chatbot “convincingly impersonates an actual human that encourages consumers to share their personal information.”  

According to the lawsuit, the plaintiff says he spoke with what he thought was a human customer service rep at Old Navy. In reality, he was speaking with an AI chatbot who recorded the entire conversation.  

In addition, the suit claims that Old Navy illegally shares customer data with third parties without informing consumers or seeking permission.

Reached by PYMNTS, Old Navy declined to comment. 

The CNBC report noted that dozens of similar suits have been filed in California against companies that include Home Depot, General Motors, Ford, and J.C. Penney, alleging unlawful recording of private online chat conversations, though not always involving AI.

AI experts say the outcome of the suit will likely involve companies adding a warning label to tell customers their chatbots might record their conversations, similar to the “This call is being recorded for quality training purposes” messages played before customer service calls.

However, the report adds that the suit showcases some pertinent privacy questions surrounding AI chatbots that may need to be answered before consumers trust AI.

“One of the concerns about these tools is that we don’t know very much about what data was actually used to train them,” Irina Raicu, director of the Internet Ethics Program at the Markkula Center for Applied Ethics at Santa Clara University, told CNBC.

However, recent research by PYMNTS Intelligence shows that consumers are already fairly comfortable in trusting AI in their everyday lives.

That research showed that 39% of consumers used voice technology built into their smartphones, 25% used a voice-enabled app on a mobile device, and 15% used the voice capabilities that come with their cars.

And with the field consisting of a number of players building out AI, there might soon be a considerable range of activities we rely on this technology to carry out.

“Picture a future, then, where one uses Alexa for commerce but Spotify to choose music or (possibly, hypothetically) order concert tickets, while those who are in thrall to the Apple ecosystem navigate through media and commerce with enhanced Siri capabilities,” PYMNTS wrote. “Amazon said in September it updated its Alexa speaker with improved conversational features, underpinned by generative AI.”