A report by former regulators Adam Teitelbaum and Stephanie Nguyen argues that banks using AI chatbots for customer service may break consumer-protection laws if the bots affect customers’ finances or block access to a human. Companies remain liable for false answers, endless loops and unsolved problems, since a chatbot does not shield them from liability. With federal enforcement retreating, the authors urge state enforcers to act and want customers to be able to reach a human in one click. Their study flags false information as one of three areas that could trigger state bans for unfair and deceptive practices. Large banks increasingly use hybrid AI, such as Bank of America’s Erica, which has handled more than 3.2 million customer interactions.
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