Artificial intelligence may be the newest member of your sales team. It works around the clock, never takes a vacation, and can communicate with dozens of customers simultaneously. Sounds like the perfect employee. But what happens when your AI chatbot makes a promise your dealership cannot keep?
As artificial intelligence becomes increasingly integrated into dealership operations, RV dealers are taking advantage of automated systems to communicate with prospective customers, answer questions, schedule appointments, and generate sales leads. These systems can provide information regarding inventory, pricing, warranties, and financing, often without any involvement from dealership personnel. While the benefits are apparent, the potential legal consequences of relying upon these systems are often overlooked.
Consider a prospective customer who visits an RV dealership’s website after business hours and begins communicating with its AI chatbot. The customer asks whether a particular used motorhome comes with a manufacturer’s warranty. The chatbot responds that it does, describes the warranty coverage, and encourages the customer to schedule an appointment. The customer subsequently purchases the motorhome, only to discover that the manufacturer’s warranty expired two years earlier.
When confronted with the discrepancy, the dealership explains that the information was generated by its AI chatbot and that no employee ever represented that the motorhome was covered by a manufacturer’s warranty. Unfortunately, that explanation may provide little protection against a claim arising from the misrepresentation.
Under Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA), section 501.204, Florida Statutes, unfair or deceptive acts or practices in the conduct of trade or commerce are unlawful. The statute does not limit its application to representations made directly by employees. Accordingly, a dealership may face liability for inaccurate or misleading information communicated through its AI system, particularly when those representations concern material terms of a transaction, including pricing, vehicle condition, warranty coverage, or financing.
Nor does the fact that the dealership contracted with a third-party technology provider necessarily insulate it from liability. From the customer’s perspective, the chatbot is communicating through the dealership’s website and appears to be acting on its behalf. Whether the dealership intended to authorize a particular representation may be of little significance to a consumer who reasonably believed the information was being provided by the dealership itself.
Depending upon the circumstances, inaccurate representations made through an AI chatbot may also give rise to claims for misrepresentation or breach of contract. Although not every statement made by an automated system will create an enforceable contractual obligation, dealerships should not assume that such communications are legally meaningless simply because they were generated by artificial intelligence.
Perhaps the greatest concern with generative AI is its ability to provide inaccurate information with remarkable confidence. Unlike traditional automated systems that rely upon predetermined responses, generative AI formulates answers based upon the information available to it. In doing
so, it may generate information that is entirely incorrect, yet present that information as an established fact.
For an RV dealership, the consequences could be significant. An AI chatbot could quote an incorrect sales price, represent that a vehicle contains equipment it does not have, misstate the terms of a warranty, or assure a customer that financing is available under terms the dealership cannot offer. These are not necessarily harmless mistakes. They are representations that may influence a customer’s decision to purchase a vehicle and ultimately form the basis of litigation.
The risks are not limited to representations concerning the sale itself. AI systems frequently collect customer names, contact information, purchasing preferences, and potentially sensitive financial information. Florida’s Information Protection Act, section 501.171, Florida Statutes, imposes obligations upon covered businesses concerning the protection of certain personal information. Dealerships utilizing third-party AI providers should therefore understand what customer information is being collected, how it is stored, and whether it is being disclosed to other parties.
None of this suggests that dealerships should abandon the use of artificial intelligence. To the contrary, these systems can provide considerable advantages when properly implemented. However, dealerships should exercise the same level of care in supervising their AI communications as they would the representations made by their own sales personnel.
At a minimum, dealerships should ensure that their AI systems are operating with accurate and current information and are not permitted to make representations concerning final pricing, financing approval, warranty coverage, or other material transaction terms without appropriate verification. Customer communications should be periodically reviewed, and records of those communications should be preserved in accordance with an appropriate retention policy. Dealerships should also review their agreements with AI providers to determine what protections, if any, exist in the event that inaccurate information or improper representations result in a claim.
Artificial intelligence will undoubtedly continue to play an increasing role in how dealerships conduct business. However, the use of new technology does not eliminate the legal obligations that accompany communications with consumers. A dealership cannot simply assume that it bears no responsibility for statements made through its own website because those statements were generated by a computer rather than an employee.
Ultimately, artificial intelligence may be the newest member of your sales team, but unlike your other employees, it does not always know when to stop talking. Until it does, RV dealers should remember that while the technology may be artificial, the legal consequences can be very real.
……Can you tell? This was created by Chatgpt, I did fact check it, but it is scary how quickly they can do your work for you signed Ejola Cook