California EDD's automated fraud detection wrongly suspended 600,000 legitimate unemployment claims
In January 2021, the California Employment Development Department used Thompson Reuters automated batch review software to flag 1.1 million unemployment claims as potentially fraudulent. EDD stopped payments on those claims without prior notice. Later, over 600,000 were confirmed as legitimate after claimants used ID.me to verify their identity. The incident highlights the trade-off between fraud prevention and timely benefit access.
- Company involved
- California Employment Development Department (EDD)
- AI system involved
- Thompson Reuters Automated Batch Review
7 source articles · read the reporting →
BC Tribunal Confirms Companies Remain Liable for AI Chatbot-Created Information - Lexology
The AI chatbot provided inaccurate information to a user.
1 source article · read the reporting →
Air Canada liable for chatbot's misleading bereavement advice
Air Canada was found liable by the B.C. Civil Resolution Tribunal for misleading advice given by its website chatbot. The chatbot told a passenger they could retroactively claim a bereavement rate, but the airline later denied the claim. The tribunal ordered Air Canada to pay $812 in compensation, noting the airline's argument that the chatbot was a separate legal entity was 'remarkable'.
- Company involved
- Air Canada
- AI system involved
- Air Canada chatbot
10 source articles · read the reporting →
SEC charges American Bitcoin Academy over $1.2M AI scam
Brian Sewell, through his company American Bitcoin Academy, allegedly defrauded 15 students of $1.2 million by claiming his Rockwell Fund would use AI to generate high returns. The SEC charged that Sewell never launched the fund and lost the investors' money when his Bitcoin wallet was hacked. The case was settled with Sewell agreeing to pay $1.6 million in disgorgement and a $233,229 penalty.
- Company involved
- American Bitcoin Academy
6 source articles · read the reporting →
Lawyer used ChatGPT to cite fake cases in BC parenting application
In a British Columbia Supreme Court case, lawyer Chong Ke used ChatGPT to generate legal case citations for a notice of application in a parenting dispute. The citations were fictitious and were discovered by opposing counsel, who incurred costs investigating them. Ke later acknowledged the error, apologized, and withdrew the fake cases before the hearing. The court considered whether to order special costs against Ke personally.
- AI system involved
- ChatGPT
9 source articles · read the reporting →
Utah's online dispute resolution system leads to default judgments against defendants
Utah's online dispute resolution system for small claims cases automatically enters default judgments against defendants who fail to register within 14 days. Samantha Thompson missed the buried notice in her summons and was ordered to pay $995.42 plus wage garnishment. The system has increased default judgment rates, especially for payday lenders. Critics say the confusing paperwork disadvantages low-income litigants.
- Company involved
- Utah State Courts
- AI system involved
- Utah Online Dispute Resolution System
4 source articles · read the reporting →
CBSE OnMark portal vulnerability exposed student data to Google Gemini
A 19-year-old ethical hacker, Nisarga Adhikary, claimed to have hacked the CBSE's digital evaluation ecosystem, revealing that personal information of students was processed by Google's Gemini in automation scripts. The Central Board of Secondary Education (CBSE) stated on May 31, 2026, that the identified vulnerabilities had been contained and other exploitable weaknesses were being ruled out. The board expressed gratitude to alert citizens and ethical hackers who pointed out the weaknesses. No actual data breach was confirmed, but the incident raised concerns about student privacy.
- Company involved
- Central Board of Secondary Education (CBSE)
- AI system involved
- OnMark
1 source article · read the reporting →
Tennessee's TennCare Connect algorithm illegally denied thousands Medicaid benefits
A U.S. District Court judge ruled that Tennessee's TennCare Connect system, built by Deloitte for over $400 million, illegally denied thousands of low-income residents and people with disabilities Medicaid and disability benefits due to programming and data errors. The system automatically terminated coverage without properly considering eligibility for all available programs. A class action lawsuit filed in 2020 resulted in the ruling.
- Company involved
- TennCare (Tennessee Medicaid)
- AI system involved
- TennCare Connect
10 source articles · read the reporting →
42,900 OpenClaw AI agents exposed, 15,200 vulnerable to RCE
SecurityScorecard's STRIKE team revealed on February 9, 2026, that approximately 42,900 OpenClaw agentic AI instances are exposed on the internet due to insecure default configurations. Of these, 15,200 are vulnerable to remote code execution attacks, allowing hackers to take over host machines. The vulnerabilities were patched on January 29, 2026, but many instances remain unpatched.
- AI system involved
- OpenClaw
5 source articles · read the reporting →
NHTSA investigation PE24016: Unexpected ADS behavior
Waymo's automated driving system exhibited unexpected behavior during driving.
- Company involved
- Waymo
1 source article · read the reporting →
Tesla Cybertruck owner sues over FSD crash in Houston overpass
Justine Saint Amour is suing Tesla after her Cybertruck, with Full Self-Driving engaged, crashed into a concrete barrier on a Houston overpass on August 18, 2025. The lawsuit alleges that Tesla was negligent in hiring and retaining Elon Musk as CEO, and that the FSD system was defective due to lack of LiDAR and ineffective automatic emergency braking. Saint Amour seeks over $1 million in damages.
- Company involved
- Tesla
- AI system involved
- Full Self-Driving (FSD)
3 source articles · read the reporting →
Citizens Advice finds ethnicity penalty in car insurance pricing
Citizens Advice conducted exploratory research into car insurance pricing and found that people of colour may be paying £250 more per year than White people. The research suggests that areas with large communities of colour may be identified as more risky by algorithms, even when objective risk factors are controlled. Citizens Advice has called on the Financial Conduct Authority to investigate the issue.
9 source articles · read the reporting →
TransUnion AI tenant screening denied 75-year-old man apartment due to mistaken littering conviction
Chris Robinson, then 75, applied for a senior living apartment in California. The property manager used an AI screening program from TransUnion, which assigned him a low score based on a mistaken conviction for littering that belonged to a different person with the same name in Texas. Robinson lost the apartment and his application fee. A federal class-action lawsuit against TransUnion moved toward a $11.5 million settlement in 2023.
10 source articles · read the reporting →
Didi fined for over-collecting personal data of users
The Cyberspace Administration of China fined Didi Global Inc. for violating data protection laws. The investigation found that Didi had over-collected personal data from passengers and drivers, including facial recognition, location, and clipboard information, totaling billions of records. The violations began in 2015 and continued until the investigation in 2021. Didi was ordered to pay a penalty and correct its practices.
- Company involved
- 滴滴全球股份有限公司 (Didi Global Inc.)
- AI system involved
- Didi ride-hailing apps
8 source articles · read the reporting →
Boeing ordered to pay $49.5 million to family of 737 MAX crash victim
A federal jury in Chicago awarded $49.5 million to the family of Samya Stumo, who died in the 2019 crash of Ethiopian Airlines Flight 302, a Boeing 737 MAX. The crash was caused by a problem with the plane's automated flight control system. Boeing admitted responsibility, and the trial determined compensatory damages for the family's loss. The family has also pushed for accountability from regulators.
- Company involved
- Boeing
- AI system involved
- 737 MAX
10 source articles · read the reporting →
Insurer drops California homeowner after aerial photo analysis
Cindy Picos was dropped by her home insurer after the company used aerial photos to assess her roof. The insurer refused to let her see the photos, and she believes her roof is in fine shape. The incident highlights the growing use of drones and aerial imagery by insurers to inspect properties without in-person visits.
2 source articles · read the reporting →
TerraUSD and Luna algorithmic stablecoin collapse wipes out $60 billion
The algorithmic stablecoin TerraUSD (UST) and its sister token Luna collapsed in May 2022, losing nearly all their value. The system, developed by Terraform Labs, used an algorithm to maintain a $1 peg for UST by swapping with Luna. A bank run triggered by large withdrawals and a drop in yields caused a death spiral, wiping out approximately $60 billion in market value. Do Kwon, the founder, attempted to save the peg using Bitcoin reserves but ultimately failed.
- Company involved
- Terraform Labs
- AI system involved
- TerraUSD (UST) and Luna
10 source articles · read the reporting →
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 →
State Farm accused of algorithmic bias against Black homeowners
A class action lawsuit filed in Chicago alleges State Farm's automated claims processing system discriminates against Black policyholders. The suit claims Black customers are more likely to face additional paperwork and longer waits for claim approval than white customers, citing data from 800 homeowners. State Farm has stated it takes the filing seriously and is committed to fair treatment, while the plaintiffs seek to enjoin the current system and require audits.
- Company involved
- State Farm
- AI system involved
- automated claims processing system
2 source articles · read the reporting →
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 →
Herbert Brooks v. Lowes Home Centers LLC (W.D. Louisiana): AI-hallucinated content in court filing, Monetary Sanction; CLE
Generated a legal brief with hallucinated case law, filed in court.
- AI system involved
- Claude
1 source article · 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 →
Woman Blindly Trusts Driver Assistance, Rear-Ends Lane-Changing Bus on Highway
女子轻信辅助驾驶放任不管 高速上直接追尾变道大巴车 - 驱动之家
On August 28, on the Shanghai-Kunming Expressway, a woman driving an SUV with driver assistance engaged rear-ended a bus that suddenly changed lanes. She assumed the system would brake automatically and took no action. The bus driver was found at fault for the lane change, but police warned against over-reliance on driver assistance.
1 source article · read the reporting →
NHTSA investigation PE24015: Rear-end Collisions Involving Zoox Vehicles
Automated driving system controlled vehicle braking and acceleration, leading to rear-end collisions with other road users
- Company involved
- Zoox
- AI system involved
- Zoox vehicle
1 source article · read the reporting →
