Chopra-Led California Agency to Probe AI for Consumer Harm
The newly formed California Business and Consumer Services Agency, led by Rohit Chopra, has announced it will scrutinize how companies deploy AI and chatbots to ensure compliance with consumer protection laws.
California's new Business and Consumer Services Agency (BCSA) will investigate how businesses deploy AI and chatbot technologies. Agency Secretary Rohit Chopra, the former director of the federal Consumer Financial Protection Bureau, announced the initiative, stating the agency will look for uses that perpetrate scams, improperly exploit consumer data, or undermine existing consumer protections. The BCSA, which launched in July, houses the Department of Financial Protection and Innovation and other state boards.
This signals a new front of regulatory risk for companies deploying generative AI and other automated tools in customer-facing roles, particularly in a key market like California. The probe will be cross-sectoral, explicitly affecting financial services, healthcare, and real estate, among others. A specific focus will be whether AI tools are being used to engage in the unlicensed practice of certain professions. Chopra's history of aggressive enforcement at the CFPB suggests the BCSA will be an active regulator.
Companies using AI to interact with California consumers should review their compliance frameworks. The BCSA will coordinate with other state agencies, so firms should anticipate information requests and scrutiny from multiple regulators.