California's New Consumer Watchdog to Probe AI and Chatbots

California's new Business and Consumer Services Agency (BCSA), led by former CFPB Director Rohit Chopra, announced it will investigate businesses' use of AI and chatbot technologies. The BCSA, launched in July and housing the Department of Financial Protection and Innovation, will probe for scams, data exploitation, and violations of consumer protection laws. A key focus is whether AI deployments constitute the unlicensed practice of professions in sectors like financial services, healthcare, and real estate. This initiative creates a significant new regulatory risk for companies using AI in customer-facing applications in the state. With Chopra's reputation for aggressive consumer advocacy, businesses should anticipate a robust enforcement agenda. Counsel for clients deploying these technologies in California should review their compliance frameworks for potential exposure and monitor for the BCSA's first enforcement actions, which could establish important precedents.