A bank uses a fully automated model to decide whether to grant unsecured personal loans, with no human involvement before the decision is communicated to the applicant. A rejected applicant asks to understand and contest the outcome. The bank relies on this automated process because it is necessary for entering into the loan contract the applicant requested. Which safeguard must the bank provide to comply with the rules on solely automated decisions producing legal or similarly significant effects?
- AIt must implement, at minimum, the right to obtain human intervention, to express the applicant's point of view, and to contest the decision. Correct
- BIt must obtain fresh explicit consent from the applicant before the automated decision can be relied upon, regardless of the contractual necessity.
- CIt must disclose the full source code and weights of the scoring model so the applicant can independently reproduce the decision.
- DIt must escalate every rejected application to the supervisory authority for prior review before the decision becomes final.
Why A is correct: Correct: for solely automated decisions with legal or similarly significant effects based on contractual necessity, the controller must put in place suitable measures including at least the right to human intervention, to express a point of view, and to contest the decision.
Why B is wrong: This is tempting because consent is one possible basis, but where the automated decision is necessary for entering into a contract the rules permit it without separate explicit consent, provided suitable safeguards are in place.
Why C is wrong: This overstates the transparency duty: the applicant is owed meaningful information about the logic involved, not the entire source code and weights, which would expose disproportionate detail and is not required.
Why D is wrong: This confuses safeguards with supervision: there is no requirement to send each rejection to the authority for prior review, and the duty is to provide internal safeguards such as human intervention and the right to contest.