Com­puter says no, not ok

The law lets on­line ser­vices turn cus­tomers away with­out an im­me­di­ate ex­pla­na­tion, re­ports Madison Reidy.

Sunday Star-Times - - BUSINESS / TECHNOLOGY -

There may be a need to have an obli­ga­tion on com­pa­nies to ex­plain how an ar­ti­fi­cial in­tel­li­gence-made de­ci­sion was made. John Ed­wards.

As­plit pay­ment ser­vice can de­cline you from us­ing it within sec­onds, with­out telling you why, but the pri­vacy com­mis­sioner says that could soon change.

If you want to pay a pur­chase off over a few weeks with no in­ter­est, some re­tail­ers will let you do it through third par­ties like PartPay, Lay­buy and Genoa­pay- but only if you pass their al­go­rithm tests.

When ap­ply­ing to use the ser­vices at the check­out, you en­ter your per­sonal de­tails and within sec­onds, it checks your credit score and iden­ti­fi­ca­tion.

It does this to find out how likely it is that you will pay back the money on time. If you are not el­i­gi­ble, (deemed too fi­nan­cially risky), you will be de­clined with no ex­pla­na­tion.

Pri­vacy com­mis­sioner John Ed­wards, said a re­fresh of the Pri­vacy Act could make those busi­nesses ex­plain their au­to­matic de­ci­sion-mak­ing for­mula to cus­tomers.

‘‘There may be a need to have an obli­ga­tion on com­pa­nies to ex­plain how an ar­ti­fi­cial in­tel­li­gence-made de­ci­sion was made. We don’t re­ally have any­thing like that at the mo­ment,’’ Ed­wards said.

There is no prin­ci­ple in the Act that man­dates busi­nesses to ex­plain the tech­nol­ogy they adopt be­hind the scenes. Legally, they just need a de­cent rea­son to take and use your data.

How­ever, Ed­wards said un­der the law cus­tomers were en­ti­tled to an ex­pla­na­tion if they asked for it.

But tech­nol­ogy con­sult­ing com­pany In­fosys’ New Zealand coun­try man­ager Pa­trick Kouwen­hoven, said it was up to cus­tomers to read the terms and con­di­tions and de­cide if they had a prob­lem with any tech­nol­ogy.

If you had an is­sue with ar­ti­fi­cial in­tel­li­gence (AI), do not sign up to the ser­vice, Kouwen­hoven said.

Ed­wards said that was ir­re­spon­si­ble.

Cus­tomers could not be ex­pected to an­a­lyse masses of terms and con­di­tions and make a fully in­formed de­ci­sion about the use of their data, he said.

PartPay chief ex­ec­u­tive John O’Sul­li­van, said his busi­ness’ al­go­rithm was not ar­ti­fi­cially in­tel­li­gent. It gath­ered and crunched on­line in­for­ma­tion, but could not think for it­self.

Kouwen­hoven said telecom­mu­ni­ca­tion com­pa­nies and banks were us­ing al­go­rithms in the same way.

A com­puter code al­go­rithm is con­fus­ing, so an ex­pla­na­tion could tell you what data was used and what data it com­pared yours to.

Welling­ton In­sti­tute of Tech­nol­ogy IT pro­fes­sor Steve Mckin­lay, said the com­puter pro­gram­ming in­dus­try was shrouded in se­crecy un­der patents and it was un­likely it would share the al­go­rithms it built for busi­nesses with the pub­lic.

O’Sul­li­van said PartPay would com­mu­ni­cate its al­go­rithm to cus­tomers the best way it could, if a law change re­quired it to.

He said new leg­is­la­tion would spark an ‘‘in­dus­try wide change’’ and af­fect peer-to-peer lenders and other credit providers.

Ed­wards agreed the com­plex­ity of al­go­rithms made trans­parency dif­fi­cult.

But it was im­por­tant to be open, be­cause if ma­chines were mak­ing de­ci­sions for cus­tomers, they had a right to know how they worked, espe­cially if they were de­clined, he said.

‘‘Au­to­mated de­ci­sion-mak­ing based on large data sets … [has] the po­ten­tial to af­fect peo­ple’s lives with­out peo­ple re­ally un­der­stand­ing how those de­ci­sions are made, and that can be a con­cern.’’

Ed­wards said New Zealan­ders ex­pected com­pa­nies to use their data for the pur­pose they said they would.

‘‘You have got to be very con­fi­dent in it and jus­ti­fied, other­wise you could be lean­ing to un­just out­comes for peo­ple.’’


Pri­vacy com­mis­sioner John Ed­wards says leav­ing T’s and C’s to cus­tomers is an ‘‘ir­re­spon­si­ble ap­proach’’.

Ad­di­tions to the Pri­vacy Act could make terms and con­di­tions longer than they al­ready are.

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