UK consumers warned over AI chatbots giving inaccurate financial advice

2 hours ago7 min read1 comments

A stark warning has been issued to UK consumers placing their financial trust in artificial intelligence, as a new investigation by consumer champion Which? exposes a minefield of dangerously inaccurate advice dispensed by popular chatbots like ChatGPT and Microsoft’s Copilot. This isn't just a minor glitch; it's a fundamental failure in the systems being marketed as futuristic personal assistants, with the research uncovering specific, costly errors across critical areas including investments, tax, and insurance.For instance, these AI tools were found to be advising users to breach HMRC's strict investment limits on Individual Savings Accounts (ISAs), a misstep that could land an unsuspecting saver with an unexpected tax bill and the administrative nightmare of rectifying it with the authorities. Imagine diligently following what you believe is expert guidance, only to find yourself penalized for it—this is the tangible risk now facing the public.The problems extend beyond domestic savings. When quizzed on travel, ChatGPT incorrectly asserted that it is mandatory to have travel insurance for visits to most EU countries, a piece of fiction that could pressure travellers into buying policies they may not need or, conversely, lead them to forgo necessary coverage based on a misunderstanding of the actual requirements.Meanwhile, Meta’s AI bot fumbled basic consumer rights, providing wholly incorrect information on how to claim compensation for delayed flights, potentially causing passengers to miss out on hundreds of pounds they are legally owed. This situation is the financial equivalent of a self-driving car occasionally steering into oncoming traffic; the convenience is utterly negated by the catastrophic failure.For anyone who has read foundational personal finance books like 'Rich Dad Poor Dad,' the core lesson is to take ownership of your financial education and not blindly follow advice. These AI failures underscore that principle for the digital age.The underlying issue is that these large language models are designed to predict the next plausible word in a sequence, not to act as certified financial planners with a fiduciary duty. They are synthesizing information from all corners of the internet, a dataset riddled with outdated regulations, regional variations, and plain bad advice, without the discernment to separate fact from fiction in a high-stakes domain.As fintech and AI become increasingly intertwined, this report from Which? serves as a crucial wake-up call. It highlights an urgent need for clear regulation and 'health warnings' on these platforms, ensuring users understand the limitations of the technology.Until these systems can be reliably audited and held to a standard akin to a human financial advisor, the safest side hustle for any consumer is to double-check every piece of financial advice from a chatbot with a trusted, authoritative source. Your financial future is too important to be left to a statistical algorithm that is still learning on the job.

#AI chatbots

#financial advice

#consumer warning

#UK

#inaccurate information

#HMRC

#travel insurance

#lead focus news

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