By: Fanta Punch and Ajay Maraj
For some, Artificial Intelligence (‘AI’) often evokes memories of the movie Terminator 2: Judgement Day. While the current form of AI has not yet advanced to the stage of “Skynet” and its threat to world domination, the pace at which AI technology continues to grow is increasingly having a direct impact on privacy and the ways in which human beings work and live. AI technology’s rapid integration into the daily lives of consumers has resulted on consumers placing heaving reliance on the technology for their goods and services.
AI undoubtedly has the capacity to improve quality of goods and services which means better outcomes for consumers. At the same time, there are equally concerning negative impacts on consumers such as data protection, influence and manipulation of consumers’ purchasing patterns and impersonation of individuals by AI generated systems such as deep fakes which can lead to misrepresentation or fraud.
Current laws are not always able to keep up with the speed of the technological innovation brought by AI technology, to sufficiently guard against potential harm and vulnerability to consumers. Even so, consumer protection legislation remains applicable and relevant to stemming the tide of practices which may overrun consumer rights.
The extent of cases involving fraud and misrepresentation using AI has led to the United States Federal Trade Commission passing a new Trade Regulation Rule to prevent the impersonation of government, businesses, and their official or agents in interstate commerce.
The European Union Parliament on 13 March 2024 approved an Artificial Intelligence Act (the ‘AI Act’) which is intended to directly address the risks posed by the commercialization of AI. The AI Act (which is now required to be approved by the EU Member States before it becomes law), is meant to oversee uniform legal framework for the development of AI systems, placing them on the market and putting them into service. It sets out various risk categories of AI systems, assigns risk values for each category and prescribes regulations/prohibitions which are appropriate for each category with increasing degrees of severity.
With world players taking decisive action for the regulation of AI, focus should be placed on our local circumstances and consideration given as to whether our current laws are sufficient to regulate AI. The regulation of AI is of particular relevance to consumer protection as the use of AI to defraud and manipulate consumers has become quite prevalent.
Trinidad and Tobago’s Consumer Protection Regime
Consumer Protection refers to laws and regulations which are geared towards the protection and safety of consumers from unfair or deceptive business practices. In addition to protecting consumers and safeguarding their interests, consumer protection regulations also provides a means of redress for aggrieved consumers.
In Trinidad and Tobago, consumer protection laws are contained throughout various pieces of legislation including but not limited to the Consumer Protection and Safety Act Chap. 82:34; Sale of Goods Act Chap 82:30; Trade Description Act Chap 82:04; and the Unfair Contract Terms Act Chap 82:37, and provides consumers with rights such as the right to consumer safety and information, examination and rejection of goods. Trinidad and Tobago’s consumer protection regime also provides for the establishment of the Consumer Protection and Services Unit of the Consumer Affairs Division, which is responsible for investigating consumer complaints, enforcing laws regulating consumer transactions and providing advice and dispute resolution services. Additionally the Data Protection Act , though only partially proclaimed, offers some protection against the misuse of personal data for companies as well as public bodies, to some extent.
The Consumer Protection Division’s mandate is quite extensive, however there is currently no legislative measure in place to regulate AI and its potential to adversely impact consumers. The Draft Consumer Protection Bill 2020 (not yet enacted into law) which is meant to further promote and protect consumer interests in Trinidad and Tobago by among other things, establishing a Consumer Affairs Tribunal, also does not provide for the regulation of AI. An argument can certainly be made that Trinidad and Tobago may be unprepared for the potential threat which AI poses to consumers though there may yet be time for fuller consideration to be given current consumer protection laws and how they may apply to the potential threats faced by AI. Understanding the nature of the threat involved is an important first step in determining ways to adequately manage some of the issues brought by AI technology.
AI – The Digital Threat Facing Consumer Protection
AI has the potential to supercharge fraud and discrimination and adversely impact consumer protection by creating misleading advertisements, descriptions and other content designed to influence and manipulate consumers to make purchasing decisions which they may not previously made. A few areas of potential exposure include:
- Facilitating deceptive and manipulative marketing practices such as but not limited to:
- (i) the creation of deep fakes which utilize fake video and/or audio clips of celebrities to endorse products or services,
- (ii) the creation of fake consumer reviews and websites for products and/or services, and
- (iii) the creation of advertisements which take into account special factors (e.g. race, religion, age, gender) to make the said advertisement particularly influential to target groups.
- Facilitating privacy violations through the collection of personal data and information via chat bots for example through Google’s ownership of Fitbit or other means without proper consent and safeguards.
- Facilitating pricing discrimination by the use of AI algorithms which are programmed to charge different prices to different consumers based on factors such as location, browsing history and personal details; and
- Using chat bots on website which are programed to be deceptive/misleading or unethically influence consumers in to making purchasing decisions which may not be in their best interests.
In the absence of oversight, there is a real risk that AI may be used to adversely affect consumers and efforts should be undertaken to regulate AI and prevent the adoption of commercial practices which are prejudicial to consumers.
AI & Consumer Protection Laws
Although not expressly regulated, to some degree AI will be regulated by Trinidad and Tobago’s current Consumer Protection Regime as the framework provides generally against unfair and/or deceptive business practices. For example, in the event that AI is used to misrepresent or falsify information relating to the description of a good or service, this will still likely amount to a breach of Trade Description Act. While the method of breach may change depending on the manner in which AI technology is used, there may be some protection under the provisions in the current Consumer Protection Regime. Impacted consumers may be able to seek some measure of redress against fraudsters who utilize AI contrary to our consumer protection laws, though it is more likely that the gap between advancement in automation and implementation of consumer protection laws that keep in step, are more challenging every day.
As AI becomes more popular and integrated into various aspects of life, there will systems and/or actions which will become automated by AI. As such, although under the ultimate oversight of an individual consumer, the system or action will be completed by AI.
A popular example of this would be Tesla’s Autopilot and Full Self Driving features which rely on AI to function. In the event of a roadway accident in which the Autopilot mode was alleged to be at fault, the question of liability would arise as it would be difficult to determine who is ultimately responsible i.e. the manufacturer of the AI system or the user under whose oversight the accident occurred. In instances such as these many potential arguments arise for both side which has possibility of leading to complex and long litigation proceedings.
Improving Consumer Protection with AI
While we have focused on the potential negative impact of AI throughout this Article, it would be remis not to mention that AI can be a powerful tool to advance consumer protection in Trinidad Tobago.
AI systems can be implemented to:
- Automate monitoring and compliance – AI can be used to create a chat bot or other such tool which can interact with the consumers or complainants on behalf of the Consumer Affairs Division so as to: obtain the relevant information, determine whether the complaint is substantive and warrants intervention, and flag same to relevant persons to save on time and costs by the Division while increasing monitoring and protection.
- Increase fraud detection – algorithms can analyze patterns in consumer behavior and transactions to identify fraudulent activities or scams which will allow for quicker intervention by relevant authorities and so reduce exposure to unsuspecting consumers.
- Improve product safety – AI can be used to analyze products and/or product reviews to determine common complaints and potential causes for concerns as well as possible ways to rectify same. This would allow companies to identify risk areas in their products and rectify same so as to not only improve the quality of the end product but also increase consumer satisfaction and in turn profitability.
- Streamline consumer complaints and dispute resolution – the first point of call for an aggrieved consumer is to make complaint to the company from which the product of service was purchased. Companies can use AI to drive dispute resolution from complainants by automating case management, processing queries and complaints in a timely manner and offering feasible resolution options to increase customer satisfaction while reducing administrative costs.
Although the above represents ways in which AI may positively impact consumer protection, the use and implementation of such AI systems should also similarly be subject to regulation and ethical governance under specialized legislation much like the EU framework so as to ensure safety and security of consumers and the wider population.
