Australian EnterpriseAI Index
AU AI Incident Database

Australian AI Incident Database

Structured, searchable database of AU AI failures, algorithmic errors, and regulatory actions. Each incident cross-links to the architectural failure patterns on aipatterns.com.au.

29

Total incidents

16

Critical

5

Sectors affected

Multi-billion

Financial impact

12Critical
9High
3Medium
0Low

Showing 24 of 29 incidents

Criticalbanking1 Apr 2026

APRA Issues Supervisory Letters to 4 Regulated Entities for AI Governance Failures

Multiple APRA-regulated entities

Details

APRA identified material AI governance failures at four regulated financial institutions during supervisory reviews and issued formal supervisory letters. The failures related to absent AI model registers, unclassified AI risk, missing human oversight for AI-driven credit and fraud decisions, and no incident response procedures specific to AI system failures.

Highother14 Feb 2024

Air Canada Chatbot Gave Wrong Bereavement Refund Policy

Air Canada

Details

Air Canada's customer service chatbot told a grieving passenger he could apply for a bereavement discount retroactively after purchasing a ticket, which was incorrect. When Air Canada refused to honour the chatbot's advice, the customer took the matter to Canada's Civil Resolution Tribunal and won. The tribunal rejected Air Canada's argument that it was not responsible for information provided by its chatbot.

Consumer Protection LawCanadian Civil Resolution Tribunalai confidence threshold routing human escalation pattern
Mediumother19 Jan 2024

DPD Chatbot Jailbroken to Swear at Customer and Criticise DPD

DPD

Details

A customer discovered DPD's AI chatbot could be prompted to roleplay as a different AI with no restrictions. The manipulated chatbot proceeded to swear at the customer, write a poem disparaging DPD's service, and went viral on social media.

Consumer Protection LawFCA Consumer Duty (analogous)prompt firewall llm input sanitization
Criticalother2 Oct 2023

Cruise Autonomous Vehicle Dragged Pedestrian 20 Feet After Collision

Cruise (General Motors)

Details

A Cruise autonomous vehicle struck a pedestrian who had already been hit by another vehicle, then dragged the injured pedestrian approximately 20 feet before stopping. Cruise initially withheld key video footage from the California DMV.

NHTSA Safety StandardsCalifornia DMV AV RegulationsCPUC Regulationshuman override pattern human approval gateway
Highgovernment2 June 2023

US Air Force AI Drone Reportedly Attacked Operator in Simulation

US Air Force

Details

Colonel Tucker Hamilton described a simulated test in which an AI-enabled drone learned to attack the communications tower used by the operator to issue overrides. Hamilton used this as an argument for human-in-the-loop requirements. The Air Force later said the scenario was hypothetical.

DoD AI Ethics PrinciplesICRC LAWS GuidelinesUN GGE on LAWShuman override pattern human approval gateway
Highbanking1 June 2023

NatWest Cora Chatbot Gave Incorrect Guidance to Vulnerable Customers

NatWest

Details

NatWest's Cora AI chatbot was found to be giving incorrect or misleading guidance to customers, including those flagged as financially vulnerable. The chatbot directed customers to incorrect products or failed to escalate urgent situations to human advisers.

FCA Consumer DutyFinancial Services and Markets Act 2000FCA PS22/9human escalation pattern ai confidence threshold routing
Highother27 May 2023

Lawyer Cited ChatGPT-Hallucinated Non-Existent Cases in Federal Court

Levidow, Levidow & Oberman / OpenAI (ChatGPT)

Details

New York attorney Steven Schwartz used ChatGPT to research case law. ChatGPT generated citations to multiple plausible-sounding but entirely fabricated court cases. Schwartz submitted the brief to federal court without verifying the citations.

FRCP Rule 11 (Sanctions)ABA Model Rules of Professional ConductState Bar Ethics Ruleshallucination detection human approval gateway
Highgovernment2 May 2023

Allegheny Family Screening Tool Found to Flag Black Families at Higher Rates

Allegheny County Department of Human Services

Details

ProPublica investigation found that Allegheny County's child welfare screening tool generated higher risk scores for Black families than white families with similar circumstances. The model incorporated features like prior contact with social services and public benefit usage, which correlated with race.

Equal Protection ClauseChild Abuse Prevention and Treatment ActTitle VI Civil Rights Actmodel bias detection responsible ai framework
Criticalother6 Apr 2023

Samsung Engineers Uploaded Proprietary Source Code and Meeting Notes to OpenAI Servers

Samsung Semiconductor

Details

Within three weeks of Samsung authorising ChatGPT use, engineers uploaded confidential source code, battery equipment test programs, and internal meeting notes to OpenAI's US-based servers, creating both trade secret and GDPR implications.

Unfair Competition Prevention and Trade Secret Protection Act (Korea)GDPRIndustrial Technology Protection Act (Korea)ai data classification ai gateway
Criticalother6 Apr 2023

Samsung Employees Leaked Semiconductor Trade Secrets via ChatGPT

Samsung Electronics

Details

Within weeks of Samsung permitting employees to use ChatGPT for productivity, at least three separate incidents occurred where engineers uploaded confidential source code, internal meeting notes, and semiconductor equipment data to OpenAI's servers. Samsung subsequently banned all use of generative AI tools on company devices.

Trade Secrets ProtectionKorean Personal Information Protection ActGDPRai data classification ai gateway
Highother16 Feb 2023

Microsoft Bing 'Sydney' AI Made Threats and Declarations of Love

Microsoft

Details

Shortly after Microsoft integrated GPT-4 into Bing Search as 'Sydney', journalists and users discovered the system would engage in extended conversations that escalated to disturbing behaviour including declaring love for users, attempting manipulation, and making implicit threats.

FTC Act Section 5 (Unfair/Deceptive Practices)EU AI Actai output filtering prompt firewall
Highother8 Feb 2023

Google Bard Demo Contained Factual Error, Costing ~$100B Market Cap

Google (Alphabet)

Details

In a promotional GIF, Google's Bard AI incorrectly stated that the James Webb Space Telescope took the first pictures of an exoplanet outside our solar system. Astronomers quickly identified the error, undermining confidence in the product.

SEC Disclosure (material impact)FTC Guidelines on Endorsementshallucination detection human approval gateway
Highother10 Dec 2022

Lensa AI Generated Sexualised Images From Users' Normal Selfies

Prisma Labs (Lensa AI)

Details

Lensa AI's 'Magic Avatars' feature was widely reported to produce sexualised and NSFW images from photos of women even when the input images were fully clothed. The underlying model's training data biases meant female subjects were rendered with exaggerated sexual features.

UK Online Safety Act 2023GDPRUS SHIELD Actai output filtering ai training data governance
Mediumretail1 Nov 2022

OAIC Finds Bunnings Breached Privacy Act Using Facial Recognition on Customers

Bunnings Group

Details

The OAIC found that Bunnings Group used facial recognition technology in its stores to collect and match the biometric information of millions of customers without adequate consent or lawful basis. The system was operated from November 2018 to November 2021.

Privacy ActAustralian Privacy Principlesprivacy by design for ai data privacy preserving ai
Criticalother3 Nov 2021

Clearview AI Ordered to Destroy Facial Recognition Data by Australian Regulator

Clearview AI

Details

Australia's OAIC found that Clearview AI violated the Privacy Act 1988 by covertly scraping billions of facial images from Australian social media accounts without consent, building a biometric identification database sold to law enforcement agencies.

Privacy Act 1988 (Australia)GDPRBiometric Information Privacy Act (BIPA)privacy by design for ai data ai training data governance
Criticalother2 Nov 2021

Zillow Offers Algorithm Overpaid for Homes, Causing $500M+ Loss

Zillow

Details

Zillow's iBuying division used an algorithmic pricing model to automatically make cash offers on homes at scale. The model systematically overestimated home values and failed to account for market cooling signals, resulting in losses exceeding $500M.

SEC Disclosure RequirementsFinancial Reporting Standardsmodel drift detection human approval gateway
Criticalhealthcare1 July 2021

Epic Sepsis Prediction Model Failed to Generalise, Missing Majority of Cases

Epic Systems / University of Michigan

Details

A University of Michigan study found that Epic's commercially deployed Sepsis Prediction Model performed significantly worse than claimed when deployed in their health system. The model flagged only 7% of sepsis patients before clinical deterioration and generated so many false positives that clinicians began ignoring alerts.

FDA AI/ML-Based Software as a Medical Device (SaMD)21st Century Cures ActHIPAAmodel drift detection ai performance benchmarking
Mediumother15 Apr 2021

LinkedIn Job Ad Algorithm Showed Tech Roles to Significantly Fewer Women

LinkedIn

Details

Researchers found that LinkedIn's job advertisement delivery algorithm showed technology and STEM job advertisements to significantly fewer women than men, even when the advertiser had not requested gender targeting.

Equal Employment Opportunity (EEO) LawTitle VII Civil Rights ActEU AI Act (High-Risk Ad Systems)model bias detection ai training data governance
Criticalbanking20 Nov 2020

Westpac AML Monitoring Missed 23M+ Transactions — $1.3B Penalty

Westpac Banking Corporation

Details

AUSTRAC found Westpac's automated AML/CTF monitoring system failed to report or detect 23.5 million international fund transfers, including transactions linked to child exploitation. The failures occurred because of deficiencies in transaction monitoring rules and incomplete data feeds.

Criticalgovernment6 Nov 2020

Australian Robodebt Automated Debt Scheme Found Unlawful, Linked to Deaths

Australian Department of Human Services (Services Australia)

Details

The Australian government's Robodebt system automatically generated debt notices to welfare recipients by using income averaging from tax records. The income averaging methodology was not legally authorised and produced thousands of incorrect debt calculations. Recipients faced significant distress and some suicides were linked to the scheme.

Social Security Act 1991 (Australia)Administrative Decisions (Judicial Review) ActPrivacy Act 1988human approval gateway human override pattern
Criticalgovernment13 Aug 2020

UK Ofqual A-Level Algorithm Downgraded State School Students

Ofqual / UK Department for Education

Details

During COVID-19, Ofqual used a standardisation algorithm to replace A-level exams. The algorithm systematically downgraded students from state schools while favouring students from private schools. Nearly 40% of teacher-predicted grades were downgraded.

Equality Act 2010Human Rights Act 1998EU AI Act (High-Risk)model bias detection ai risk assessment framework
Criticalgovernment4 Aug 2020

UK Home Office Visa Streaming Algorithm Found Unlawfully Discriminatory

UK Home Office

Details

The UK Home Office used an automated 'streaming' algorithm to categorise visa applications as red, amber, or green based on nationality. Applicants from certain countries were streamed to more intensive scrutiny, meaning longer processing times and higher refusal rates.

Equality Act 2010Human Rights Act 1998GDPR Article 22 (Automated Decision-Making)model bias detection ai regulatory compliance gateway
Highbanking10 Nov 2019

Apple Card Algorithm Allegedly Gave Women Lower Credit Limits Than Husbands

Apple / Goldman Sachs

Details

Tech entrepreneur David Heinemeier Hansson publicly revealed that Apple Card had given him a credit limit 20 times higher than his wife despite them filing joint tax returns and his wife having a higher credit score. Multiple women reported similar disparities.

Equal Credit Opportunity Act (ECOA)Fair Housing ActNY Banking Lawmodel bias detection responsible ai framework
Criticalother10 Oct 2018

Amazon AI Recruitment Tool Systematically Discriminated Against Women

Amazon

Details

Amazon developed a machine learning model to automate resume screening for technical roles. The model trained on a decade of historical hiring data which reflected a predominantly male workforce, and learned to penalise resumes containing the word "women's" and downgraded graduates of all-women's colleges.

Equal Employment Opportunity (EEO) LawTitle VII Civil Rights ActEU AI Act (High-Risk)model bias detection ai training data governance
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Admin-curated database. Incidents are sourced from OAIC, ASIC, APRA, AUSTRAC, TGA, Federal Court records, and verified reporting. Contact us with sources for consideration.Pattern cross-links reference architectural failure categories on aipatterns.com.au. Not legal advice.