Credit: BritCats Studio/Adobe Stock California Loan Agency Hit With Proposed Class Action Over Alleged Third-Party AI Data Harvesting
The suit accuses Lendistry of breaching a contractual obligation to protect the beneficiaries' data privacy by deploying AI technologies that harvested class members' business, behavioral and biometric data and transmitted it to third-party companies without adequate disclosures.
October 31, 2024 at 10:13 AM
3 minute read
The original version of this story was published on The Recorder
What You Need to Know
- The California government partnered with loan agency Lendistry in 2023 to compensate businesses and nonprofits affected by the COVID-19 pandemic.
- Lendistry was hit with a class action accusing it of siphoning the beneficiaries' data via AI technologies it used to administer the grants.
- The attorney representing the plaintiffs says that the lawsuit is emblematic of inadequate safety regulations around AI.
Los Angeles-based loan agency B.S.D. Capital, doing business as Lendistry, was slapped with a putative class action on Monday for allegedly siphoning confidential data via third-party artificial intelligence software that it used to administer a statewide grant program.
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