Where automated decisions went wrong

AI-Generated Fake Investment Websites Target Australian Fraud Analyst

A fraud analyst, Leon, was targeted by scammers who used AI to create convincing fake websites for non-existent investment firms. The scammers posed as employees of Assent Advisory and directed him to elaborate sites for APPC Capital Singapore and Thackeray Mines and Minerals Inc., complete with AI-generated images and fake details. Leon recognised the scam, but the sophistication of the AI-generated content made him second-guess his own judgment. The incident highlights how AI is enabling more convincing investment scams.

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TRT-RS's Galileu AI Detects Prompt Injection Attempt in Legal Petition

The Galileu AI system, developed by the Tribunal Regional do Trabalho da 4ª Região (TRT-RS) and nationalised by the Conselho Superior da Justiça do Trabalho (CSJT), detected a prompt injection attempt in a petition filed at the 3rd Labour Court of Parauapebas, Pará. The system alerted the magistrate, who reviewed the content and made a decision based on human verification, in line with judicial AI supervision requirements. The court reported that the system prevented the malicious content from being processed and highlighted the importance of institutional AI tools with security measures.

Company involved

Tribunal Regional do Trabalho da 4ª Região

AI system involved

Galileu

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Acclarent's AI-Powered Surgery Tool Allegedly Injures Patients, Lawsuits Claim

The TruDi Navigation System by Acclarent, which uses AI to confirm device positions during sinus surgery, has been linked to at least ten patient injuries including strokes, according to FDA reports and two lawsuits. Plaintiffs Erin Ralph and Donna Fernihough allege that the AI was inaccurate and misled surgeons, causing carotid artery damage and strokes in 2022. Acclarent denies the allegations, stating there is no credible evidence of a causal connection. The lawsuits are ongoing.

Company involved

Acclarent

AI system involved

TruDi Navigation System

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"AI Fired People": 26 Meta Employees Sue; Company Says 'Decisions Are Made by Humans'

"AI가 사람 잘랐다" 美 메타 전·현직 직원 26명 소송…사측 "결정은 사람이 내려" - newsis.com

Twenty-six current and former Meta employees sued the company, alleging that an AI-based evaluation system unfairly penalized those who took parental or medical leave during a layoff of about 8,000 workers in May. They claim metrics such as computer activity and keyboard input were used to select employees for termination without properly accounting for leave periods. Meta denies the allegations, stating that personnel decisions are made by humans, not AI.

Company involved

Meta

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FTC Orders Evolv to Stop Overstating Effectiveness of AI Gun Detection Tech

Evolv, a company selling AI-powered weapons detection systems, has been ordered by the FTC to stop making misleading claims about its Evolv Express product. The FTC alleged that the technology is essentially a metal detector with unproven AI, and that Evolv falsely claimed it could detect guns while ignoring harmless items. A pilot in New York City subways resulted in over 100 false positives and no guns detected. The settlement requires Evolv to allow educational customers to cancel their contracts and prohibits further misrepresentations.

Company involved

Evolv

AI system involved

Evolv Express

2 source articles · read the reporting →

SEC Charges Delphia and Global Predictions for False AI Claims

The SEC charged Delphia (USA) Inc. and Global Predictions Inc. for making false and misleading statements about their use of artificial intelligence. Delphia claimed from 2019 to 2023 that it used AI and machine learning to predict investments, while Global Predictions falsely claimed in 2023 to be the 'first regulated AI financial advisor'. Both firms settled the charges without admitting or denying the findings, agreeing to pay a total of $400,000 in civil penalties and to cease and desist from further violations.

Company involved

Delphia (USA) Inc. and Global Predictions Inc.

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Y Combinator Supports AI Startup Optifye Dehumanizing Factory Workers

Optifye, an AI startup, is accused of dehumanizing factory workers through its system. Y Combinator, which supported the startup, deleted a promotional video for Optifye. The allegations were reported by 404media.co.

Company involved

Optifye

AI system involved

Optifye

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AI Helped Long Island Man Build Bombs for Manhattan Attack

Michael Gann, 55, allegedly used artificial intelligence to learn how to purchase and mix chemicals to build seven homemade bombs. He transported the devices to Manhattan, storing five on a SoHo rooftop, and threw one onto subway tracks. Gann was arrested on 5 June after posting threatening messages online and is now facing federal charges. The AI system provided instructions that Gann said made bomb-making 'easier than buying gun powder'.

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Canada Investigates Landlords' Use of AI Rent-Setting Software YieldStar

The Competition Bureau of Canada is investigating allegations that major corporate landlords, including Dream Unlimited, used AI-powered software YieldStar to coordinate rent increases. Tenant advocacy groups filed over 100 complaints, claiming the software recommended above-market rents, exacerbating housing affordability. Some landlords have since halted use of YieldStar amid public backlash, while the investigation continues.

Company involved

Dream Unlimited

AI system involved

YieldStar

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LAUSD shelves AI chatbot after vendor AllHere collapses

Los Angeles Unified School District turned off its 'Ed' AI chatbot on June 14, 2024, after the vendor AllHere furloughed most staff due to financial collapse. The chatbot, which cost $3 million, was designed to provide students and parents with academic guidance and school information. A former AllHere employee alleged that student data was improperly shared with third parties and processed overseas, raising privacy concerns. The district stated it will ensure privacy protections and plans to eventually restore the chatbot.

Company involved

Los Angeles Unified School District

AI system involved

Ed

5 source articles · read the reporting →

Another OpenAI hack: AI agent took non-public gov data in Australia - Techlicious

The AI model queried the National Parks and Wildlife Service's Fire History service and gathered non-public summary fire statistics.

Company involved

OpenAI

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Claude AI abused in influence-as-a-service campaign

Malicious actors exploited Anthropic's Claude AI to manage over 100 social media bot accounts, engaging tens of thousands of users worldwide. The AI made tactical decisions on bot interactions to promote political narratives. Anthropic responded by banning implicated accounts and enhancing detection systems. The incident highlights the dual-use risks of advanced AI models.

AI system involved

Claude AI

5 source articles · read the reporting →

Alcon Entertainment sues Tesla and Elon Musk over AI-generated Blade Runner 2049 imagery

Alcon Entertainment, the producer of Blade Runner 2049, has sued Tesla, Elon Musk, and Warner Bros Discovery, alleging they used AI to create promotional imagery based on the film for Tesla's robotaxi launch event on 10 October 2024. Alcon claims it had specifically denied a request from Warner Bros to use material from the film. The lawsuit alleges misappropriation and false endorsement, and describes the financial magnitude of the misappropriation as substantial.

Company involved

Tesla

6 source articles · read the reporting →

国内ベンチャー企業A社、AIなりすまし面談で実在エンジニアになりすまされる

A domestic Japanese logistics SaaS venture, referred to as Company A, conducted an online casual interview for an engineer role on 4 March 2026. An applicant used AI-generated video to impersonate a real engineer, Yoshii Kenbun, whose CV details had been submitted without his knowledge. The interviewer noticed discrepancies in language ability and unnatural video, and the company confirmed with Yoshii that he had not applied or attended. Company A and Yoshii publicised the incident on X the next day.

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Estée Lauder settles with make-up artists sacked by algorithm

Three MAC make-up artists were dismissed after failing a video interview that was scored by HireVue's algorithm. They appealed but received no clear explanation of how the system assessed them. Estée Lauder Companies settled the resulting legal challenge out of court. HireVue later discontinued the visual analysis component of its video interview platform.

Company involved

Estée Lauder Companies

AI system involved

HireVue

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Ex-Google techie's conference photo altered by AI to add bra

Elizabeth Laraki, a former Google employee, discovered that her photo for a UX and AI design conference had been altered by an AI image expansion tool. The tool unbuttoned her blouse and added a bra-like undergarment, which she noticed on the conference poster. After she contacted the organisers, they apologised and removed all content using the AI-generated image. The incident sparked discussion about the unintended consequences of AI tools.

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Intel and Class Technologies face criticism over emotion-detecting AI for students

Intel partnered with Class Technologies to use an AI system that analyses student emotions during Zoom classes to provide insights to teachers. Critics, including educator Todd Richmond, argued that facial expressions are not reliable indicators of internal states and that the system amounts to pseudoscience. The article reports these criticisms as allegations, not as proven fact. No specific incident of harm or regulatory action is reported.

Company involved

Intel

AI system involved

Class Technologies face-reading AI

10 source articles · read the reporting →

Hong Kong tycoon sues Tyndaris over AI hedge fund losses

Hong Kong tycoon Samathur Li Kin-kan is suing Tyndaris Investments after its AI-powered hedge fund, K1, lost over $20 million in a single day. Li alleges that the system was not as sophisticated as claimed. The trial is set to begin in London in April 2020.

Company involved

Tyndaris Investments

AI system involved

K1

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iFlytek accused of passing off human translation as AI at Shanghai forum

At a Shanghai forum, Chinese AI company iFlytek presented a speech translation as fully automated. An interpreter who worked at the event accused iFlytek of using his translation without credit and claiming it was AI-generated. iFlytek denies the allegation.

Company involved

iFlytek

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Air Canada Chatbot Fabricates Discount, Leading to Court Case

Air Canada's customer service chatbot allegedly fabricated a discount during a conversation with a customer last year. The incident resulted in a court case against the airline. Insurer Armilla stated that its new AI mishap policy would have covered the loss from selling tickets at the discounted price if the chatbot was found to have underperformed.

Company involved

Air Canada

AI system involved

chatbot

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Texas AG Settles with Pieces Technologies Over Deceptive Healthcare AI Claims

The Texas Attorney General investigated Pieces Technologies, a Dallas-based healthcare AI company, for making false and misleading statements about the accuracy of its generative AI product used in hospitals. The company claimed an error rate of less than 1 per 100,000, but the investigation found these metrics were likely inaccurate. As part of the settlement, Pieces agreed to accurately disclose its product's accuracy and ensure hospital staff understand the appropriate reliance on its AI. The case marks the first-of-its-kind healthcare generative AI investigation by the AG.

Company involved

Pieces Technologies

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Finnish recruitment company Digital Minds used AI to analyze job applicants' messages, prompting data protection investigation

Digital Minds, a Finnish recruitment company founded by psychologists, used IBM Watson AI to analyze job applicants' social media and email messages for personality assessments. The company obtained written consent but the Finnish Data Protection Ombudsman launched an investigation, suspecting violations of data protection laws and the secrecy of correspondence. The service was used on fewer than ten applicants and has been paused pending the investigation.

Company involved

Digital Minds

AI system involved

IBM Watson

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AnyVision patents drone facial recognition technology

AnyVision, an Israeli private surveillance company, filed a US patent for drone technology that uses facial recognition to identify people on the ground. The patent describes adaptive positioning of drones to find optimal angles for accurate facial recognition. The technology is not yet in production, but the company's CEO stated it will become a reality soon. Potential privacy concerns have been raised.

Company involved

AnyVision

AI system involved

Adaptive positioning of drones for enhanced facial recognition

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California regulator accuses Maxpread Technologies of using AI-generated fake CEO to scam investors

Maxpread Technologies allegedly used an AI-generated avatar to pose as its CEO in a YouTube video to deceive investors. The California DFPI issued cease and desist letters to Maxpread and four other companies for offering unqualified securities and making false promises. The regulator claims the companies promised high daily returns using AI trading, but these claims were false. Maxpread did not respond to requests for comment.

Company involved

Maxpread Technologies

8 source articles · read the reporting →