Similar to any new and emerging technology, Artificial Intelligence (AI) is beginning to have a big impact on our day-to-day lives. It has brought with it numerous benefits for consumers in the form of new/improved products & services and enhanced safety.

From our smartphones and fitness trackers to internet-based voice assistants (VAs), the use of AI has various applications as well as implications, both for consumers as well as consumer organisations.  

However, the other aspects of this emerging technology are concerns regarding unresolved legal questions, and consumer law is no exception to this. Some of these areas include the unethical use of AI, bots surpassing human intelligence, and algorithmic bias.

An example of this could be companies tailoring their prices, contract terms, and advertising to the respective customer profile and exploiting the consumer’s biases and/or their willingness to pay. Further, in some cases, these AI-based insights can also be used illegally by companies for scoring systems to decide whether a consumer can purchase a product or take up a service. 

In this blog, we address some of these concerns, explore more about AI-based consumer services and how they can help protect consumer rights. 

5 Ways AI-based Systems Can Be Used To Strengthen

Consumer Rights 

Among the key ways, AI-based systems can be used to strengthen consumer rights include –

1. AI-based Personalization 

AI-based personalization refers to the strategic categorization of different customer data sets and extracting valuable insights from them. These insights are then fed into an automation engine that can take appropriate action without any kind of human intervention. 

AI-based personalization allows businesses to ensure that both information given to consumers and contracts are customized or tailored to suit their specific needs. 

Further, taking into account this kind of customized information such as specific customer needs, preferences, and capabilities can help businesses design more individualized products and services, thus avoiding the one-size-fits-all approach.

2. Facilitating Consumer Protection 

AI can facilitate consumer protection in general by improving the work of consumer organizations, research, and other regulatory authorities. AI allows market studies and forecasting to be carried out with better accuracy. 

Further, enforcement entities could also use AI systems for things such as automatic screening of consumer contracts and alerting consumers about potentially unfair rates/terms before they make an online purchase. 

3. Automated Compliance Monitoring  

AI systems can also be used for the enforcement of consumer regulations and automated compliance monitoring. Legal-tech companies can benefit most here by ensuring that consumers can enforce their rights quickly, easily, and in a cost-effective manner.  

4. Improving Consumer Experience 

The use of AI in consumer markets can also help businesses increase general efficiency by matching supply with demand. 

Price monitoring, search engines, and price-comparison tools are some of the paths that can help consumers substantially reduce search and transaction costs, compare complex offers easily and choose the best deal.

5. AI-Enabled Machines 

With more and more consumer appliances AI-enabled now, there is a remarkable increase in efficiency. For example, a smart plant watering system or a vacuum cleaner robot can help liberate consumers from daily household chores and give them more time, which they can use productively for other tasks.  

For normal consumers, such AI-based smart systems offer the potential to optimize energy use and lower utility costs. 

The Way Forward 

AI is often perceived as a source of threats and challenges by consumers. On top of that, consumer laws too are often seen as difficult and inaccessible for many. 

However, the need is to take into account the larger consumer law perspective and focus on identifying the deficits of the current legal framework. This is primarily for the use of AI-based systems to be able to determine the corresponding need for regulation in specific areas and risks. 

Further, apart from consumer laws, other related fields of law that are interlinked with consumer law such as data protection and anti-discrimination should also be considered. The idea here is to not restrict ourselves to combat the challenges posed by AI but to embrace AI consumer services as a robust tool with the potential to empower society and consumers at large.

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