NJ S3668: Requires notification of use of artificial intelligence system in certain communications with consumers. Verified

Senate Bill S3668 requires any person or entity that employs an artificial intelligence system to communicate with consumers via online platforms to notify the consumer at the outset of contact. This notification must clearly state that an AI system is being used and provide details on how to reach a human representative, including contact information and availability. Compliance is mandatory upon establishing contact with the consumer, ensuring that consumers are aware they are interacting with an AI rather than a human. Entities that fail to comply with these requirements will be committing an unlawful practice under New Jersey's Consumer Fraud Act. The penalties for non-compliance include a monetary fine of up to $10,000 for a first offense and up to $20,000 for subsequent offenses. Additionally, violations may lead to cease and desist orders from the Attorney General, and under the consumer fraud act, there is the possibility of punitive damages and treble damages awarded to affected consumers. The bill defines 'artificial intelligence' broadly, encompassing software and hardware capable of performing tasks that typically require human intelligence, such as decision-making and speech recognition. This definition aligns with contemporary understandings of AI technology, ensuring that a wide range of AI applications falls under its purview. This legislation reflects a growing trend among states to regulate AI usage, similar to laws in California and Illinois that also focus on transparency and consumer rights in AI interactions. As such, businesses operating in New Jersey should prepare for compliance to avoid significant penalties and ensure consumer trust.