# Generative AI Risks: Data Leakage and Hallucinations

- Link: https://dbr-soft.com/generative-ai-risks-data-leakage-and-hallucinations/
- Published: 2026-10-24T18:08:40+00:00
- Author: David Botero

Generative AI tools draft text, summarize documents, and write code. They also introduce
risks that every business should understand.

**Risk 1: Data leakage**

Employees paste confidential information into public AI tools. Depending on the 
service and plan, that data may be stored, reviewed, or used in ways you didn’t 
intend.

– **Reduce it:** approve business-grade tools with clear data terms, block unapproved
services where possible, and train staff on what must never be entered

**Risk 2: Hallucinations**

AI can produce confident, plausible, and wrong answers, including invented facts,
citations, and numbers.

– **Reduce it:** require human review of anything important, verify facts against
reliable sources, and never rely on AI alone for legal, medical, or financial decisions

**Risk 3: Prompt injection**

Hidden instructions in a document, email, or web page can manipulate an AI tool 
that reads them, especially one that can take actions.

– **Reduce it:** limit what AI tools can access and do, and require approval for
sensitive actions

**Risk 4: Over-permissioned access**

AI assistants connected to your files and email can surface information that people
technically have access to but shouldn’t see.

– **Reduce it:** clean up permissions before enabling AI features

**Risk 5: Intellectual property and copyright**

Output may resemble existing content, and ownership rules vary.

– **Reduce it:** review outputs, avoid pasting others’ protected material, and check
terms of use

**Risk 6: Bias and fairness**

AI can reflect biases in its training data, which matters in hiring, lending, and
customer decisions.

– **Reduce it:** test for bias, keep humans involved in decisions affecting people

**Risk 7: Privacy law**

Personal information handled by AI brings obligations under Quebec’s Law 25 and 
other privacy laws, including transparency about automated decisions.

**Risk 8: Cost and dependency**

Usage-based costs can grow fast, and heavy reliance on a single vendor creates lock-
in.

**A simple governance starter**

1. An AI use policy

2. A list of approved tools

3. Data classification rules

4. Human review requirements

5. Training for all staff

**DBR Soft can help you write an AI policy and deploy approved tools securely.****
[Contact us for more information.](https://dbr-soft.com/contact/)**

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