The CFPB has entered the chat
June 7, 2023 / Source: CFPB
Answering customers’ questions, and helping them resolve problems, is the bedrock of relationship banking. Many financial institutions are automating these interactions through chatbots.
The role of customer service chatbots has grown as financial institutions are moving from simple, rule-based chatbots toward more sophisticated technologies, including those supported by large language models and those marketed as “artificial intelligence.”
Automated systems can fail to help customers
Through consumer complaints, we’ve heard that automated systems can fail to live up to the hype. We’ve also heard from consumers that when chatbots are poorly deployed, they frequently receive rudimentary, circular answers pointing them towards FAQs, or that their questions are met with inaccurate and unreliable information. When we see financial institutions fail to provide people with vital and accurate information, it gets our attention.
Financial services companies have obligations about customer service
Financial institutions offering or providing consumer financial products or services have legal obligations, including obligations regarding responding to disputes or questions from customers. To comply, financial institutions need to be able to competently interact with customers about the products or services they provide. Financial institutions may not live up to these obligations if, for example, they fail to:
- Provide accurate information. The CFPB has repeatedly found that it can be an unfair, deceptive, or abusive act or practice (UDAAP), in violation of the Consumer Financial Protection Act, to provide customers with inaccurate information, including where customer service representatives provided inaccurate information in response to customer inquiries.
- Ensure customers can access money or make payments. The CFPB has also found violations when institutions failed to resolve problems raised by consumers in accessing their money or making payments.
- Protect customers’ data. The CFPB has also noted that, in addition to other federal laws governing data security for financial institutions, including the Safeguards Rules issued under the Gramm-Leach-Bliley Act, entities can violate the CFPA’s UDAAP prohibition when they have insufficient data protection or information security.
The CFPB has received consumer complaints about chatbots that raise concerns about whether the use of chatbots hinders institutions’ ability to meet applicable legal obligations. We are actively monitoring the use of chatbots to ensure that their use by financial institutions adheres to existing consumer finance laws and intend to use all the available tools to prevent consumer harm.
People expect good customer service
People are entitled to accurate answers, especially when they are grappling with a stressful and complex financial situation. The consequences of getting it wrong can be dire. Consumers deserve relationships and communication channels with their financial institutions that respect their time, promptly resolve their issues, and provide information in a manner that is accessible and actionable.
Read our issue spotlight on the use of chatbots in consumer finance to learn more.