On October 20, the New York City Department of Consumer and Worker Protection (DCWP) issued a proposed rule under the city’s Consumer Protection Law to address “deceptive and unconscionable trade practices” tied to businesses’ growing use of automated customer service systems, such as chatbots and automated phone menus. The proposal would cover systems in which all or “substantially all” communication to consumers is made by technology rather than a person, and would require merchants to disclose clearly and conspicuously, at the start of an automated interaction and in the language being used, that the consumer is dealing with an automated system rather than a human representative. It would also make it a deceptive and unconscionable trade practice to promise customer service and then fail to provide it “in a reasonable and timely manner” by repeatedly and unreasonably routing consumers to menus that do not address their inquiries or giving them unresponsive, irrelevant or erroneous information. A merchant using an automated system would face a rebuttable presumption that it violated this standard unless it offers a way to reach a human. That could be a “single-step transfer mechanism,” such as a “Press 0” option with an estimated wait time, or, if no human is available, instructions for another way to get help, such as a phone number, live chat, callback, contact form, text line, or email address with stated hours or response times.

DCWP cited California, Maine, New Jersey and Utah as states that have adopted similar disclosure measures. The proposal would also make it a deceptive trade practice to say customer service is available through a channel, such as phone or email, that the merchant does not actually use for customer service. Merchants would have to keep compliance records for at least three years, including contracts for the systems, logs of each automated interaction, annual aggregate data on transfers, resolutions and repeat contacts within 72 hours, and copies of the disclosures used. A separate provision states that using, or relying on, a technology is not a defense to a violation of any law or rule within DCWP’s jurisdiction. Further, the proposal would impose a $525 penalty for a first violation, $1,050 for a second, and $3,500 for a third or later violation, and existing law sets a $3,500 penalty for knowing violations. Comments are due November 19, the date on which DCWP will hold a public hearing.