AI Hallucinations in Customer Support: When Chatbots Lie to Your Customers

## Air Canada Lost a Court Case Because Their Bot Made Stuff Up

In 2024, Air Canada's chatbot told a grieving customer he could book a full-fare flight and apply for a bereavement discount retroactively. That policy didn't exist. The customer booked. Air Canada refused the discount. The customer sued. Air Canada argued the chatbot was "a separate legal entity" responsible for its own words.

The tribunal didn't buy it. Air Canada paid.

This is what hallucination looks like in production. Your ...