A pair of House Democrats has introduced sweeping legislation to regulate artificial intelligence chatbots, a bill that could have significant implications for companies in the accounts receivable management industry that are deploying or considering AI-powered consumer communication tools.
Rep. Valerie Foushee [D-N.C.] and Rep. Greg Casar [D-Texas] last week introduced H.R. 9619, the People-First Chatbot Act, which would establish federal safeguards around data privacy, transparency, and safety for AI chatbots. The bill builds on the bipartisan GUARD Act and is backed by more than 30 consumer advocacy, child safety, and privacy organizations, including the Electronic Privacy Information Center, the Consumer Federation of America, and the National Consumers League.
For the ARM industry, one provision stands out. Any business that uses an AI chatbot for customer service communications would be required to disclose at the start of each interaction that the consumer is communicating with a machine, and to immediately transfer the consumer to a human operator physically located in the United States upon request, including by voice command. Companies would also be barred from implying that chatbot outputs are provided by or equivalent to those of licensed legal, accounting, or financial professionals, a line that collection operations using AI tools will want to watch closely.
The bill’s data provisions are equally consequential. Providers could not use chat logs for targeted advertising, sell chat logs, or use adult users’ data for training AI models without affirmative opt-in consent. Using minors’ data for training would be prohibited outright. Consumers would gain the right to access and delete their chat logs, and government entities could not compel production of chat logs without a warrant.
Enforcement is where the bill grows teeth. Violations would be treated as unfair or deceptive acts under the FTC Act, and state attorneys general could bring civil actions on behalf of residents. The bill also creates a private right of action with statutory damages of up to $10,000 per violation for most provisions, and minimum statutory damages of $50,000 to $250,000 for violations involving harmful design features for minors. Courts could award up to five times those amounts for willful violations. Notably, the bill imposes liability on chatbot providers for injuries caused through use of their products even if the provider exercised all reasonable care, and it explicitly does not preempt state laws that are at least as protective.
Providers would also be required to conduct monthly safety assessments of their chatbots for risks including suicide, emotional dependence, and compulsive usage, with quarterly public reporting.
The FTC would have 12 months after enactment to issue implementing regulations. With state legislatures already moving on AI chatbot rules and litigation against chatbot providers mounting, the bill signals that federal lawmakers see AI consumer interactions as the next major regulatory frontier.
