NEWS: Chatbots are becoming more common as credit unions try to reduce the costs of customer service agents. Does your credit union use chatbots? If so, the CFPB has concerns. In a recent CFPB Spotlight, CFPB Director Rohit Chopra says, “A poorly deployed chatbot can lead to customer frustration, reduced trust, and even violations of the law.” The CFPB is receiving complaints from frustrated customers who cannot get sufficient responses to their questions or disputes.
The CFPB’s full report highlights some of the challenges associated with the deployment of chatbots in consumer financial services. The agency has concerns about whether these chatbots will be able to handle the nuances and complicated nature of consumer protection laws without giving customers (or members) inaccurate information. It goes on to say that “Financial institutions should avoid using chatbots as their primary customer service delivery channel when it is reasonably clear that the chatbot is unable to meet customer needs.” The CFPB stressed that financial institutions are supposed to work with their customers to resolve a problem or answer a question, which is what relationship banking is all about.
The spotlight highlights several risks around chatbots:
- Non–compliance with federal consumer financial protection laws. Financial institutions run the risk that when chatbots ingest customer communications and provide responses, the information chatbots provide may not be accurate, the technology may fail to recognize that a consumer is invoking their federal rights, or it may fail to protect their privacy and data.
- Diminished customer service and trust. When consumers require assistance from their financial institution, the circumstances could be dire and urgent. Instead of finding help, consumers can face repetitive loops of unhelpful jargon. Consumers also can struggle to get the response they need, including an inability to access a human customer service representative. Overall, their chatbot interactions can diminish their confidence and trust in their financial institutions.
- Harm to consumers. When chatbots provide inaccurate information regarding a consumer financial product or service, there is potential to cause considerable harm. It could lead the consumer to select the wrong product or service that they need. There could also be an assessment of fees or other penalties should consumers receive inaccurate information on making payments.
Credit unions are reminded that when deploying new technologies, they should do so in ways that comply with existing law and, ideally, that enhance the member relationship. The CFPB will monitor the use of “artificial intelligence” (AI), and it expects financial institutions to use chatbots in a “manner consistent with their customer and legal obligations”.
League Legal Affairs Attorney’s Conference
Jul 25, 2023 9:00 AM – 3:00 PM, Madison WI – Information and Registration.
The League Legal Affairs Attorney’s Conference brings together attorneys from Wisconsin’s Credit Unions for a day of discussion around Compliance and Legal matters of importance to our members. Please invite your credit union attorney to attend!
Agenda:
9:00 am – 3:00 pm
*More details on sessions coming soon
9:00 am – 9:30 am
Welcome and Coffee
9:30 am – 10:30 am
Paul Guttormsson, Senior Vice President & General Counsel | The League
10:30 am – 12:00 pm
Tom Theune, Director | Office of Credit Unions, DFI
12:00 pm – 12:30 pm
Lunch
12:30 pm – 1:00 pm
John Engel, Director of Legal Affairs | The League
1:00 pm – 2:00 pm
Melissa Caulum Williams | Senior Counsel | Husch Blackwell
Melissa will lead a session on HR Compliance issues
2:00 pm – 2:30 pm
Kim Hoppe, Compliance Resource Analyst | The League
2:30 pm – 3:00 pm
Roundtable Discussion Adjourn
Location:
Credit Union House
1 East Main Street, Suite 101
Madison, WI 53703
Fees:
$179 | Early Bird by July 7
$199 | Regular