The Biden administration has instructed the CFPB to scrutinize the use of chatbots by financial institutions as part of the new “Time is Money” initiative which aims to streamline consumer interactions and eliminate inefficient customer service practices.

Announced last week, the CFPB will issue guidance to identify when the use of automated chatbots or AI voice recordings is unlawful, particularly when customers believe they are interacting with a human.

While chatbots can effectively handle basic inquiries, the administration notes that they struggle with resolving more complex issues.

New Rule on Customer Service “Doom Loops”
The CFPB is also expected to propose a rule requiring companies to allow customers to speak to a human by pressing a single button, to help them avoid getting stuck in an automated customer service “doom loop.”