Acme Student Loan Company has developed an artificial intelligence algorithm that determines whether an individual is likely to pay their bill or default. A person who is determined by the algorithm to be more likely to default will receive frequent payment reminder calls, while those who are less likely to default will not receive payment reminders.
Which of the following most accurately reflects the privacy concerns with Acme Student Loan Company using artificial intelligence in this manner?
If an algorithm uses risk factors that impact its automatic decision-making process, it is crucial for the institution to ensure that it does not have a disparate impact on protected classes in its output. The main privacy concern here is not just the use of the data, but how it affects different groups of individuals, especially those in protected classes. Algorithms must be designed and tested to ensure fairness and to prevent discrimination against these groups.
Difference of phrasing.
https://www.ftc.gov/business-guidance/blog/2020/04/using-artificial-intelligence-and-algorithms See above. Even the examples provided therein use public information, but result in disparate impacts, and therefore are subject to challenge by the FTC.
A - If the algorithm uses "Risk Factors" that impact the automatic decision engine