New York City proposed rules that would make businesses disclose automated customer service and offer a one-step route to a human. A hearing is set for November 19.
New York City wants businesses to tell you when you are talking to a machine, and to give you a fast way to reach a real person. The city's Department of Consumer and Worker Protection (DCWP) proposed the rules on October 20, 2026. The proposal is not final.
The rules cover AI chatbots, older automated phone systems, and simpler chatbots that follow set scripts. Businesses also could not mislead customers about whether customer service is available, and could not escape responsibility by blaming the technology.
Customer service here means help with a product, service, account, refund, billing issue, complaint, cancellation, fraud claim or dispute. Banks, other financial companies and retailers would feel it most. The rules may also reach businesses outside the city that contact city residents. It is unclear whether federal law would override the city rules for national and state-chartered banks.
A business that uses an automated system without offering a way to reach a human would be presumed to be engaging in deceptive and unconscionable practices. It could still try to prove otherwise. Repeated violations could bring penalties of up to $3,500.
A separate city bill, the POWERS Act, could add lawsuits. If passed in its current form, consumers and certain nonprofits could sue, with statutory penalties of up to $2,500 per violation. That depends on the bill's final wording.
Consumer advocates and former regulators say the rules would stop systems that trap people in repetitive exchanges, give wrong information or block refunds and cancellations. Georgetown law professor Adam Levitin questions whether human representatives will solve problems if they are limited by scripts or lack authority. He also warns that compliance costs could raise prices. Business groups cite concerns about scope, unclear standards and legal risk.
DCWP will hold a public hearing on November 19, 2026, at 11:00 a.m. Written comments are due that day. No effective date has been set. Commissioner Sam Levine wrote an October 21 New York Times opinion piece that suggests the department may move quickly, possibly before the holiday shopping season. Businesses that serve New Yorkers should review their chatbots, phone menus and records now.
If you run a business that serves New Yorkers, check your chatbots and phone menus now, because these rules could arrive quickly and carry fines.
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