New York City is taking a significant step toward regulating artificial intelligence (AI) in customer service by introducing legislation aimed at enhancing transparency and safeguarding consumer rights. The proposed bill, known as Introduction 1118-2026, seeks to impose stringent requirements on businesses employing AI-driven chatbots.
Under this legislation, companies would be mandated to clearly inform users that they are interacting with a chatbot rather than a human. This disclosure must occur before any output is generated, repeated every hour during interactions, and provided each time a user inquires about the chatbot’s nature. The notification should be accessible to users with disabilities, presented in the user’s language, and displayed in a font size no smaller than the largest text on the interface. Additionally, chatbot providers would be required to maintain a comprehensive data security program, with safeguards proportionate to the personal data and chat logs they hold, and to make this program publicly available on their website. ([lexlint.io](https://lexlint.io/l/us-ny-new-york-city-n-y-c-council-t2026-2599-pro?utm_source=openai))
The bill also emphasizes user data rights, granting individuals access to their own chat logs and imposing restrictions on how chatbot providers can utilize user data. Notably, it prohibits chatbots from implying that their outputs are equivalent to advice from licensed professionals, such as doctors or lawyers. ([openborough.nyc](https://openborough.nyc/legislation/int-1118-2026?utm_source=openai))
This initiative is part of a broader legislative effort by the New York City Council to address the challenges posed by AI technologies. Alongside Introduction 1118-2026, the Council is considering a suite of bills that include requirements for third-party validation of AI systems and the implementation of human override mechanisms, commonly referred to as “kill switches.” ([council.nyc.gov](https://council.nyc.gov/press/2026/09/25/3252/?trk=article-ssr-frontend-pulse_little-text-block&utm_source=openai))
The move reflects growing concerns about the potential risks associated with AI in consumer interactions. Instances of chatbots providing inaccurate or misleading information have underscored the need for regulatory oversight. For example, earlier this year, New York City faced criticism when a business assistance chatbot offered incorrect and, in some cases, illegal advice to users. ([techradar.com](https://www.techradar.com/pro/zohran-mamdani-is-set-to-kill-off-new-yorks-functionally-unusable-business-chatbot-which-often-gave-out-illegal-advice?utm_source=openai))
By introducing these regulations, New York City aims to balance the benefits of AI innovation with the protection of consumer rights, setting a precedent for other jurisdictions grappling with similar issues.