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A Complaint Against Faulty AI-Based Fraud Detection System in US Highlights Key Concerns Regulators Must Note

EPIC’s complaint states that Thomson Reuters indulged in acquiring data unlawfully and using “harmful AI practices” in building its tool, Fraud Detect.

The Electronic Privacy Information Centre (EPIC) has filed a complaint against the Thomson Reuters with the US Federal Trade Commission (FTC) alleging development and deployment of faulty fraud detection system called ‘Fraud Detect’ through unlawful practices. On the basis of a three-year-long investigation carried out by EPIC, the organisation’s complaint states that Thomson Reuters—a multinational information services conglomerate—indulged in acquiring data unlawfully and using “harmful AI practices” in building Fraud Detect. What’s Fraud Detect? Fraud Detect is an automated tool, which is primarily used for detection and prevention of frauds in the government or commercial healthcare service delivery system. According to the complaint, Thomson Reuters’ Fraud Detect system has been provided to government agencies in at least 42 different states. These agencies rely on the system for determining “how much assistance public benefits recipients should receive, if any, as well as whether and when to initiate fraud investigations or overpayment proceedings”. EPIC has called on the FTC to investigate the company for “unfair and deceptive practices” in violation of provisions of the FTC Act and the US’ Fair Credit Reporting Act. More about the complaint discussed below. Why it matters: This case raises critical questions regarding deployment of automated systems for public delivery programmes. Who develops these systems and how? What guides the development of tools that are used for facilitating governance? What are the requirements that private companies are obligated to meet before launching products that cater to a larger public? Who will be held accountable for any potential…

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Curious about the intersection of technology with education, caste and welfare rights. For story tips, please feel free to reach out at sarasvati@medianama.com

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