New York City's Department of Consumer and Worker Protection (DCWP) proposed a rule on October 20 that would require businesses to disclose when customers are dealing with an automated system such as an AI chatbot, and to provide an easy way to reach a human representative. The city pitches the proposal as an end to customer service "doom loops," and violators would face civil penalties starting at $525.
The rule would make it a deceptive and unconscionable trade practice for a business to suggest customer service is available when it isn't. Beyond disclosure and human access, businesses that advertise assistance would have to deliver meaningful help, and companies would have to accept responsibility when their AI results in unlawful conduct.
DCWP published the proposed rule in the City Record on October 20. New Yorkers have 30 days to comment, and the process includes a public hearing. If the rule is adopted, the city says New York would be the first municipality in the nation able to enforce this type of protection.
Key facts
- 01NYC's DCWP proposed the rule on October 20, 2026, and published it in the City Record the same day.
- 02Businesses would have to disclose automated systems such as AI and offer an easy way to reach a human representative.
- 03Civil penalties would start at $525, and violators could owe restitution to harmed consumers.
- 04The public comment period runs 30 days and includes a public hearing.
- 05DCWP cites a Gartner finding that chatbot resolution rates range from 17% for billing disputes to 58% for returns or cancellations.
Enforcement would sit with DCWP citywide. On top of the penalties, businesses found in violation could owe restitution to consumers who were harmed. The department licenses more than 45,000 businesses across more than 45 industries.
The city's case leans on resolution data. DCWP's announcement cites a Gartner report finding that chatbots resolved customer service issues at rates ranging from 17% for billing disputes to 58% for returns or cancellations.
Mayor Zohran Mamdani said companies that force people through automated responses before they can reach a person are taking their time, money, and patience. He pointed to banking problems, refunds and package returns as the everyday cases the rule targets.
“Whether you're trying to resolve a problem with your bank, get a refund or return a package, you deserve access to real help.”— Zohran Mamdani, Mayor of New York City
DCWP Commissioner Samuel A.A. Levine said poor service can decide whether someone gets a critical prescription refilled, a student loan rehabilitated, or a large refund recovered. Levine previously led the Federal Trade Commission's Bureau of Consumer Protection.
“We are not waiting for Washington to come to the rescue of working people.”— Samuel A.A. Levine, DCWP Commissioner
The proposal builds on earlier DCWP actions, including its ban on subscription traps and its rule on hidden hotel fees. Deputy Mayor for Economic Justice Julie Su backed the measure, as did Stephanie T. Nguyen, a former FTC Chief Technologist and now a senior fellow at Columbia Law School's Center for Law & the Economy.
The rule does not prohibit AI customer service. It sets conditions on it: disclosure, a working path to a human, and liability for what the automated system does. Neither the city's announcement nor early coverage of the proposal included a response from businesses or industry groups.
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