Is AI for Sales & Marketing Illegal??
Disclaimer: I am not an attorney and anything I share should be confirmed with your legal counsel before you take any action on it.
Intro: Why am I writing this?
I spent a few years as a telemarketing compliance consultant…
… and in those years I gained an intimate understanding and appreciation of the risks involved in SMS and Telemarketing.
The fines can quickly reach 7 and 8 figures for companies that are aggressively using the phone/SMS to grow their business, however…
If you understand the risks and the rules, (and you have compliance-focused partners) you can directly reach your target audience in an intimate way that outperforms the digital media and other trendy methods.
Since 2017….
Before my compliance years, I was an early adopter of chatbots and conversational sales/marketing. In 2017 I started Chatbot Funnels to help companies scale their outreach with chatbots, and in 2022 as ChatGPT came on the scene, I returned to my marketing roots and have been using and teaching AI for sales and marketing.
(Order my book: The AI Strategy Playbook: 21 Marketing Plays for Cutting Costs, Increasing Performance and Speeding Up AI Adoption )
Today: AI Meets Sales & CX Calls
Today, I’m at (VAgents) and we work with organizations who want to use AI for CX and telemarketing to augment their contact center. Beyond call centers, I am often asked for help with AI sales strategy via chatbots, email, social, and SMS. (hit me up if you need help)
With my compliance background, I can’t help but want to share best practices for the ethical and compliant use of AI for those wanting to use it for sales and marketing.
Finally, after attending the Troutman Amin Law Conference of Champions I learned some solid contact and now feel prepared to share.
**If you have specific legal questions or need a review of your policies and compliance practices, I strongly recommend you reach out to the Troutman Amin LLP.
The AI / Marketing Regulation Landscape
When it comes to sales and marketing regulations, there are many regulatory bodies. Each one may or may not have a say in what you are doing, however, these are the main entities you should be concerned with:
FTC - Federal Trade Commission
FCC - Federal Communication Commission
CFPB - Consumer Financial Protection Bureau
CCPA - California Consumer Protection Act
CPRA - California Privacy Rights Act
CIPA - California Invasion of Privacy Act
MISC - State Privacy and Telecom Laws
AI Legislation Overview
FTC:
There are no official regulations, but there have been actions taken and statements made. ie, Rite Aid was banned from using facial recognition because they did not have safeguards in place. (read more)
In addition, the FTC has published various articles and statements about the use of chatbots, AI, and related tech. Transparency is critical and even ensuring the output is not harmful. (read more)
FCC:
In recent months the biggest Federal regulatory comments have been on AI calls. When someone cloned President Biden’s voice to make calls things went crazy. In response the FCC clearly stated what was legal and illegal.
For people who understand telemarketing law, the actual restriction is no different than the TCPA’s autodialer requirements.
You can’t use AI voice for cold calls. ie. calls w/o consent. You will need to get prior express written consent before outbound calls using AI voice require prior express written consent like TCPA's autodialer requirements.
Inbound calls have no requirements other than don't attempt to deceive.
CIPA:
Having voice or chat conversations with California residents with AI could fall under CIPA's wiretapping privacy protection and you could face a lawsuit if recording is not disclosed and or consented.
AI Marketing Compliance Summary and Best Practices (*again, not legal advice)
If you're using consumer information to train an LLM or allow an LLM to train or use, many states’ privacy policies, you’ll want to get consent.
If AI is used in any type of decision-making, especially hiring or firing this should be disclosed beforehand. (a hot topic in state legislation)
If AI is used in communicating with customers, it should be disclosed and listed in your policies. (best practice and some state privacy policies.)
If AI is used for outbound calls or texts, prior consent via disclosure and checkbox is needed similar to autodialers. (Federal Law, TPCA)
If AI is used for Inbound calls, it’s ideal to disclose its AI. (not required)
If AI is used with any marketing of political state or federal elections, there are strict requirements and regulations. (a hot topic in state and federal legislation)
Generative AI for anything creative works may not be able to be copywritten or protected. Thus if you want protection/ownership best to not use it.
BONUS: Review US State Privacy Legislation :)
As this chart shows, there is a LOT of state activity in terms of privacy legislation. Your compliance/legal team should probably monitor the list to ensure compliance.
https://iapp.org/resources/article/us-state-privacy-legislation-tracker/
Conclusion
Don’t let fear and or ignorance keep you back from using AI to grow your company. There are new use cases, tools, and capabilities every week. You just need to have the right team of professionals to help you take advantage with minimum risk.
If you need a marketing attorney or for more details on all the AI-related laws and regulations, talk with Troutman Amin.
If you need a trustworthy AI sales/marketing strategy with robust software, schedule a call with me to discuss.
Arvell Craig
VAgents.com
ArvellCraig.com
P.S. Are you an attorney?
If any attorneys have opinions, critiques, or additional guidance on my article, I welcome to share your comments and info in the comments. My goal in writing this was to start the conventional but also be a resource to others who know much more.
Create a Great Day!
🔥