Government reviews AI customer service amid consumer complaints

The review comes as consumers increasingly report difficulties resolving complaints through automated systems, prompting calls for stronger escalation mechanisms and easier access to human support when AI tools fail.

The Indian government is examining the growing use of artificial intelligence in customer service as consumers raise concerns about automated systems failing to resolve complaints and making it difficult to connect with human representatives.

The Department of Consumer Affairs is assessing whether companies need to strengthen their grievance redressal mechanisms, particularly where AI-driven chatbots and automated support tools are unable to provide satisfactory solutions.

Push for stronger complaint resolution

Officials are considering measures that could require businesses to upgrade their complaint-handling processes within defined timelines. Companies that fail to address consumer grievances effectively could potentially face action under provisions of the Consumer Protection Act.

The review reflects growing concerns that while AI-based customer support can improve response times and handle routine queries, poorly designed systems may leave consumers navigating repetitive responses without a clear route to escalation.

Consumer rights experts have also called for a hybrid approach in which automated systems handle straightforward requests while human agents remain accessible for complex or unresolved complaints. Such a model could help businesses retain the efficiency benefits of AI without compromising consumer access to meaningful assistance.

Human support remains critical

The government’s consideration comes as AI becomes increasingly embedded in customer-facing operations across sectors, including banking, e-commerce, telecom and digital services.

The proposed approach could place greater emphasis on accountability and effective escalation, ensuring that consumers are not left without assistance simply because their complaint cannot be resolved by an automated system.

For businesses, the move could also signal a shift in how AI customer service is evaluated—from response speed and automation rates to whether the technology actually delivers satisfactory grievance resolution.