BMW Dealer Required to Pay an Additional $5,000 for Used X3 Due to AI Chatbot Mistake

      BMW

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      Management is increasingly turning to AI chatbots for cost-saving measures, while employees see them as a way to reduce their workload. However, this relies on the software being capable of performing its assigned tasks correctly. A Canadian BMW dealership recently discovered that assuming this could lead to significant costs.

      According to CBC News, when facing a substantial repair bill, Zach Giacomelli chose to sell his 2021 BMW X3 back to BMW Toronto, the dealership from which he purchased the vehicle in 2023. After reaching out, he received a text from “Quinn,” who inquired about the X3 (which was at the dealership for repairs) and subsequently provided an offer of $27,162.79 CAD ($19,385.68 USD at current exchange rates).

      This was promising news for Giacomelli, as the offer matched the exact amount he owed on the car. However, shortly after, he received a call from a genuine salesperson who informed him that the offer was invalid. They clarified that “Quinn” was a chatbot—a detail Giacomelli was unaware of during negotiations—and it had made a mistake. The salesperson conveyed that the dealership was only willing to offer, at most, $20,000 CAD—around $7,000 ($4,995 U.S.) lower than what the chatbot proposed.

      “I feel embarrassed, and I feel angry that I’ve been negotiating with this bot,” Giacomelli told CBC News. “If they’re going to replace their employees with AI, they need to honor what that AI states.”

      After CBC News reached out, the dealership decided to honor the initial offer of $27,162.79 CAD to rectify the situation for Giacomelli, sales manager Scott Shadbolt explained in a phone interview. Shadbolt elaborated that a human employee's miscommunication led the chatbot to incorrectly interpret the owed amount—$27,162.79 CAD—as the dealership's offer.

      In Canada, businesses can be held accountable for errors made by chatbots. In 2024, for instance, Air Canada had to honor a fare refund after a chatbot provided incorrect information to a customer, as reported by CBC News. A lawyer consulted by the publication noted that, despite Giacomelli not accepting the offer (he had made a slightly higher counteroffer), it was reasonable to assume an agreement existed since the chatbot scheduled a physical meeting, stating, “let’s lock it in today at 3:30.”

      Despite the initial uncertainty regarding the outcome, this situation turned out favorably for Giacomelli. Avoiding communication with a car salesperson is appealing from a buyer’s viewpoint, especially when one benefits financially from the chatbot's error. However, the trend of substituting human sales staff with AI in dealerships may face short-lived success if such mistakes continue to occur.