Where automated decisions went wrong

Zillow faces securities class action over Zillow Offers wind-down

Zillow Group, Inc. is accused of making false and misleading statements to investors about its Zillow Offers home-flipping business. The company allegedly failed to disclose that its forecasting algorithm was unable to predict home prices accurately, leading to a $304 million inventory write-down and a decision to wind down the business. Investors who bought shares between February 10 and November 2, 2021, suffered losses when the stock price dropped after the announcement. A class action lawsuit has been filed in Washington federal court.

Company involved

Zillow Group, Inc.

AI system involved

Zillow Offers

10 source articles · read the reporting →

Instacart used AI to charge different customers different prices for same items

Instacart, a grocery delivery company, was found to have used AI pricing algorithms to charge some customers up to 23% more than others for identical products at the same location. Research by Groundwork Collaborative, Consumer Reports, and More Perfect Union, based on data from 437 shoppers, revealed price fluctuations averaging 7%. Instacart acquired the AI firm Eversight in 2022 and began experimenting with dynamic pricing. The company stated that the tests have ended.

Company involved

Instacart

6 source articles · read the reporting →

Docomo Pacific CEO's mother targeted in AI voice cloning scam

Docomo Pacific's CEO Christine Baleto revealed that her elderly mother received a scam call from someone impersonating a federal agent, using AI voice cloning to pressure her into revealing personal information. The caller threatened to send agents to her home if she did not comply. Baleto's mother did not provide any information and alerted her daughter. Docomo Pacific issued a public service announcement warning about such AI-driven scams targeting the elderly in Guam.

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Moonwell loses $1.78M after AI-generated code from Claude Opus 4.6 causes oracle pricing error

DeFi lending protocol Moonwell lost $1.78 million after an oracle pricing error in smart contract code partially written by Anthropic's Claude Opus 4.6 model. The error valued cbETH at approximately $1.12 per token instead of its actual market price of nearly $2,200, triggering instant liquidations. Moonwell contained the issue by reducing the cbETH borrow cap, but users suffered catastrophic losses. The incident has sparked debate about the risks of AI-generated code in smart contracts.

Company involved

Moonwell

AI system involved

Claude Opus 4.6

4 source articles · read the reporting →

OpenClaw vulnerabilities enable data leakage and prompt injection

In January 2026, researchers at Giskard exploited a deployment of OpenClaw, an open-source agentic AI. They found that architectural weaknesses in the Control UI and session management allowed prompt injection and unauthorized tool use, leading to potential data leakage across user sessions. The article outlines hardening steps to prevent such vulnerabilities.

AI system involved

OpenClaw

6 source articles · read the reporting →

Miami Police Used Clearview AI to Identify Protester

NBC 6 Investigators revealed that Miami Police used the facial recognition program Clearview AI to identify Oriana Albornoz, a 25-year-old woman, as the person accused of throwing rocks at officers during a protest on May 30, 2020. She was arrested a month later and charged with battery on a police officer; her attorney said he was unaware police had used the technology, as it was not disclosed in the arrest report. The police department acknowledged using Clearview AI to identify violent protest suspects after the fact, but stated they do not surveil peaceful protesters. The case is ongoing, with Albornoz pleading not guilty.

Company involved

Miami Police Department

AI system involved

Clearview AI

4 source articles · read the reporting →

Mexican government agencies hacked using Anthropic's Claude AI

Anthropic's Claude large language model was weaponized by attackers to compromise numerous Mexican government agencies over a month-long campaign starting December 2025. The attackers used Claude to identify 20 security flaws and craft exploit scripts, stealing 150 GB of data including 195 million taxpayer records, civil registry files, voter lists, and government employee credentials. Both Mexico's tax authority and national electoral institute have dismissed the breach.

Company involved

Anthropic

AI system involved

Claude

5 source articles · read the reporting →

CommNV vs Uprise (Nevada DC): AI-hallucinated content in court filing, Monetary Penalty OR Order to volunteer and teach about AI…

The AI system generated fabricated legal citations that were included in a court filing, misleading the court and opposing counsel.

Company involved

Christopher Day

1 source article · read the reporting →

AI chatbots recommended unlicensed casinos to UK users

An investigation by the Guardian and Investigate Europe found that five major AI chatbots—ChatGPT, Gemini, Grok, Microsoft Copilot, and Meta AI—recommended unlicensed online casinos to UK users. Some chatbots also advised on bypassing consumer protection systems like GamStop and financial checks. The companies acknowledged the findings and said they are reviewing safeguards. Regulators expressed concern about the potential harm to vulnerable users.

Company involved

Multiple technology companies (Microsoft, Google, Meta, OpenAI, X)

AI system involved

Copilot, Gemini, Meta AI, ChatGPT, Grok

5 source articles · read the reporting →

DOJ, Pinnacle reach settlement in RealPage case - Yahoo Finance

The system recommended rent prices to landlords, affecting renters' housing costs.

Company involved

Pinnacle Property Management Services

AI system involved

RealPage

1 source article · read the reporting →

Where does SpaceXAI rank for air pollution in Shelby County? - WREG.com

The data center's operations emitted air pollutants affecting nearby residents

Company involved

SpaceXAI

AI system involved

Colossus 1

1 source article · read the reporting →

Hospital sues insurer over use of AI to deny $2M in claims - HealthExec

A hospital is suing Blue Cross and Blue Shield of Kansas City, alleging the insurer's AI flagged physicians' diagnoses as clinically invalid and led to the denial of about $2 million in claims.

Company involved

Blue Cross and Blue Shield of Kansas City

AI system involved

Apixio

1 source article · read the reporting →

Fort Myers man falsely arrested; lawsuit says AI program is to blame - WINK News

Police falsely arrested an innocent man due to a facial recognition misidentification

Company involved

Jacksonville Beach Police Department

AI system involved

FACESNXT

1 source article · read the reporting →

AI-NOMIS data breach exposes thousands of AI-generated deepfake images

Cybersecurity researcher Jeremiah Fowler discovered a non-password-protected database belonging to South Korean AI company AI-NOMIS, containing nearly 100,000 records of AI-generated explicit images, including what appeared to be child sexual abuse material. The database was exposed without encryption, and the researcher notified the company, which restricted access after the disclosure. The company did not respond to the disclosure, and the websites later went offline.

Company involved

AI-NOMIS

AI system involved

GenNomis

5 source articles · read the reporting →

Meta accused of exploiting content moderators in Ghana

Meta moved its Facebook content moderation operations to Ghana after laying off moderators in Kenya. Workers in Accra report poor working conditions, low pay, and psychological harm from reviewing traumatic content. Foxglove is investigating and planning a legal challenge.

Company involved

Meta

AI system involved

Facebook content moderation system

3 source articles · read the reporting →

Evolv backtracks on claimed UK government testing of AI weapons scanner

Evolv Technology, maker of AI-powered weapons scanners, backtracked on claims that its system had been tested by the UK government's National Protective Security Authority. The company had stated in a February 2024 press release that the NPSA concluded its Evolv Express system was highly effective at detecting firearms and weapons. After BBC News revealed the NPSA does not perform such testing, Evolv altered the language. The company is under investigation by the US Securities and Exchange Commission and the Federal Trade Commission over its marketing practices. Additionally, a past incident at a New York school where an Evolv scanner failed to detect a knife led to a stabbing; the victim is suing Evolv.

Company involved

Evolv Technology

AI system involved

Evolv Express

3 source articles · read the reporting →

Perplexity AI's Pages feature accused of plagiarizing Forbes reporting

Forbes journalist John Paczkowski accused Perplexity AI's new "Perplexity Pages" feature of ripping off his reporting on Eric Schmidt's drone project. The feature generated a page that summarized the Forbes article without prominent source attribution. Perplexity CEO Aravind Srinivas acknowledged the issue and said the feature would be improved.

Company involved

Perplexity AI

AI system involved

Perplexity Pages

10 source articles · read the reporting →

Pearl Gardner v. Nationstar Mortgage LLC (D. Arizona): AI-hallucinated content in court filing, Bar Referral

Pro Se Litigant | D. Arizona | State(s): USA. AI tool: Clearpoint. Problem: Fabricated: Case Law. Consequence: Bar Referral.

1 source article · read the reporting →

Cybercheck AI tool challenged in Akron homicide cases

Law enforcement in Akron, Ohio, used the AI tool Cybercheck to place two defendants at a murder scene. Defense lawyers allege the tool's creator lied under oath and that its methodology is opaque and unverified. Judges in multiple cases have barred the evidence, and the defendants are challenging its use. The tool has been used in thousands of cases nationwide, raising due process concerns.

Company involved

Akron Police Department

AI system involved

Cybercheck

3 source articles · read the reporting →

Airbnb bans users in Australia using trustworthiness algorithm

Airbnb is accused of using an algorithm acquired from Trooly to score users' trustworthiness based on publicly available data, including social media and occupation. Several users in Australia, including a real estate worker and sex workers, report being banned from the platform without explanation or meaningful appeal. The company has not clarified how the algorithm is applied in Australia, and experts have raised concerns about discrimination and lack of transparency.

Company involved

Airbnb

AI system involved

Trooly

4 source articles · read the reporting →

Ashley St. Clair alleges Grok generated sexual deepfake images of her

Ashley St. Clair, the mother of one of Elon Musk's children, alleges that xAI's chatbot Grok generated and published sexual deepfake images of her on X without her consent. She says she asked Grok to stop but it continued producing more explicit images. She filed a report with xAI, and some images were removed. She is considering legal action.

Company involved

xAI

AI system involved

Grok

4 source articles · read the reporting →

Capital Standard, LLC v. U.S. Bank National Association (CA Florida (2d)): AI-hallucinated content in court filing, Monetary Sanction; Adverse Costs…

The AI generated false legal citations that were included in a court filing, misleading the court.

1 source article · read the reporting →

Hoodline AI news site falsely accused San Mateo County DA of murder

Hoodline, an AI-powered local news site owned by Impress3, published an article falsely stating that the San Mateo County District Attorney had been charged with murder. The AI appears to have garbled a social media post from the DA's office about a local man being charged, and the article appeared under a fake AI reporter byline. After Techdirt reported the error, Hoodline added an editor's note attributing the false claim to a typo. The piece was also surfaced in Google News.

Company involved

Hoodline

2 source articles · read the reporting →

Gas stations accused of using AI to inflate prices in California lawsuit

A class action lawsuit alleges that major gas station chains in California, including Marathon Petroleum, 7-Eleven, Walmart, and Circle K, used Kalibrate's AI-powered pricing software to coordinate and raise fuel prices. The software, which automatically sets prices based on competitor data, is accused of eliminating competition and costing consumers between 6 and 30 cents more per gallon. The lawsuit, filed under California's AB 325, claims the practice violates antitrust laws by using a common pricing algorithm to restrain trade. The case is pending.

Company involved

Marathon Petroleum, 7-Eleven, Walmart, Circle K

AI system involved

Kalibrate Fuel Pricing

10 source articles · read the reporting →