White House and CFPB take action against “ineffective, time-wasting chatbots”

The White House and the Consumer Financial Protection Bureau are On the trail of chatbots.

On Monday, the White House announced a Government-wide initiative The campaign is titled “Time is Money” and targets how companies waste consumers’ time and money, such as forcing consumers to go through complicated processes to cancel paid memberships.

“Companies often intentionally design their business processes to be time-consuming or otherwise burdensome for consumers in order to prevent them from getting a discount or refund they are entitled to, or from canceling a subscription or membership they no longer want – all with the goal of maximizing profits,” the White House said in a press release announcing “Time is Money.”

Two of these efforts could have a direct impact on companies in the financial services sector if the rules outlined in the White House announcement are implemented.

First, the Consumer Financial Protection Bureau plans to issue rules or guidelines to combat ineffective Chatbots used by financial institutions as a substitute for customer service, the White House announcement said. The agency will determine when the use of these features is unlawful, including in situations where customers believe they are speaking to a human.

“While chatbots can be helpful in answering simple questions, they often have limited ability to resolve more complex issues and disputes,” the press release states. “Instead, chatbots often provide inaccurate information and turn away customers seeking a real human.”

This effort follows a report published by the CFPB last year It outlined the concerns of consumers who have complained about chatbots, highlighting the potential for these assistive features to “cause significant harm” if they provide consumers with incorrect information or prevent them from speaking to a live agent.

There are documented cases outside the banking sector that illustrate these dangers. For example, earlier this year a civil court ordered Air Canada to pay a customer a bereavement discount after the chatbot told him he could apply for a retroactive fare refund. The airline later told him he had to submit the request before the flight.

Financial institutions are also gradually exploring Use cases for conversational features powered by generative artificial intelligence. Financial institutions Are rather restrict generative AI to internal use cases.

The Time Is Money initiative also addresses customer service “dead loops,” which are extensive menu options and recordings that prevent customers from connecting with a real human. The CFPB is one of the agencies on the White House’s list to address this issue. The announcement said it will begin a legislative process that would require companies under its jurisdiction to connect customers with humans at the touch of a button.