From the course: Responsible AI: Principles and Practical Applications
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Risk and impact assessment models
From the course: Responsible AI: Principles and Practical Applications
Risk and impact assessment models
- The Michigan State Unemployment Insurance Agency struggled for years to efficiently review unemployment claims, and weed out those that were fraudulent, as this work had become a financial drain on the state. Over a four-year period, the state's auditor general estimated losses of tens of millions of dollars in overpayments, and hundreds of millions of dollars in fraud penalties. To streamline its unemployment claims process, the Michigan State Government contracted a third party vendor to develop an AI-enabled system to determine unemployment eligibility, flag fraudulent benefits claims, and automatically intercept income tax refunds to recoup the misallocated funds. The system was rolled out across the state in 2014 and operated for nearly three years before a significant flaw was detected. It had wrongly flagged nearly 40,000 people for unemployment fraud. Many of these individuals' wages and tax returns were…
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