Connecticut Enacts AI Consumer Protection Legislation

Connecticut's Public Act 24-119 came into effect on 1 October, establishing new protections for consumers engaging with artificial intelligence (AI) and chatbot services. This legislation, signed into law on 31 May, focuses specifically on automatic subscription renewals for such services. It mandates clear disclosure and consent mechanisms for these recurring charges.

Under the new law, businesses offering AI or chatbot services must provide consumers with a clear, conspicuous, and easy-to-understand disclosure of all material terms before obtaining consent for an automatic renewal. This disclosure must include the total cost, frequency of charges, and a straightforward cancellation method. Consumers must actively consent to these terms; pre-checked boxes or opt-out schemes are prohibited.

The legislation defines an 'AI service' as any system that automates tasks or processes typically performed by humans. A 'chatbot' is specified as an AI service designed to simulate human conversation. These definitions encompass a broad range of consumer-facing applications, from virtual assistants to AI-powered subscription tools.

This act represents an early instance of state-level regulation addressing the commercial deployment of AI. Its scope is narrower than comprehensive AI governance frameworks, concentrating on consumer transaction transparency. This targeted approach reflects a growing legislative interest in the commercial practices surrounding AI services, particularly where recurring financial commitments are involved.

Businesses found in violation of Public Act 24-119 face potential enforcement actions. The Connecticut Department of Consumer Protection is responsible for overseeing compliance. Penalties may include civil fines and restitution for affected consumers. This regulatory move could inform similar legislative efforts in other states, establishing precedents for consumer protection within the evolving AI services market.

The implementation of this law prompts questions regarding its broader impact on AI service providers operating nationally. Will a patchwork of state-specific regulations emerge, or might this initiative spur a more harmonised federal approach to AI consumer protection?