Coalition of State Attorney Generals Take Position on AI in Telemarketing

On November 17, 2023, the Federal Communications Commission (FCC) issued a Notice of Inquiry (NOI), inviting public feedback on the implications of artificial intelligence (AI) on unsolicited and illicit phone calls and text messages. This NOI prompted a response from 26 State Attorneys General¹ who, on January 16, 2024, submitted a comment letter to the FCC. The letter proposed restrictions on AI utilization in telemarketing calls due to the potential harm this technology could inflict on consumers.

The FCC sought public feedback on the possible need "to define AI technologies in a more specific way to take into consideration the potential ability of AI technologies to function as the equivalent of a live agent when interacting with consumers." While some enterprises may consider using AI to replicate live agent interactions over the phone, the coalition of attorneys general strongly recommended that the FCC prohibit such applications for outbound calls in any forthcoming rulemaking process.

The attorneys general noted that existing legislation likely already covers AI technology that employs a simulated human voice. They advised the FCC to regard these technologies as no different from "soundboard" technologies or other artificial voice systems, which the TCPA prohibits without the consumer's prior express written consent.

The technologies referred to by the coalition may appear similar, but the latest generation of AI systems have the capability to engage with a consumer in real time. Advocates would argue that these systems operate much closer to a live agent interaction and are far more advanced than previous "soundboard" or decision tree-based systems that only take into account a finite possible list of scenarios or options.

Nonetheless, regulators are expected to exercise caution when considering the authorization of any AI calling technologies due to the potential for consumer harm. In one recent example of a federal regulator grappling with this technology, the Consumer Financial Protection Bureau (CFPB) released a report last year on the use of chatbots in consumer finance, a related technology application. The CFPB pointed out that the agency “expects institutions using chatbots to do so in a manner consistent with the customer and legal obligations.” Businesses contemplating the use of AI-based technologies should proceed with care and consider how these systems comply with the current interpretations of the TCPA and other relevant consumer protection laws.

¹ The states represented in the coalition are: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Washington D.C., Hawaii, Illinois, Massachusetts, Maine, Maryland, Michigan, Minnesota, Mississippi, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont, and Washington.