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AI, CX & Telemarketing: Insights on Legal Safeguards

The author of this insight is a Research Intern at the Indian Society of Artificial Intelligence and Law as of March 2024.



The rise of Artificial Intelligence (AI) has brought about significant changes in industries like telemarketing, telesales, and customer service. People are discussing the idea of using AI instead of human agents in these fields. In this insight, we will dive into whether it is doable and what ethical concerns we must consider, especially regarding putting legal protections in place.

AI in Customer Services & Telemarketing So Far

Using AI in telemarketing and customer service seems like a great way to make things smoother and more effective when dealing with customers. Thanks to fancy AI tech like natural language processing (NLP) and speech recognition, AI systems can handle customer questions and sales tasks really well now. They can even chat in different languages, which is a promising tool for customer convenience.

The reason AI integration seems possible is because it can automate monotonous tasks, analyze loads of data, and give customers personalized experiences. Take chatbots, for example. They can chat with customers, figure out what they like, and suggest stuff they might want to buy. This can make customers happier and even lead to more sales. Also, AI can predict what customers might need next, so companies can be proactive about helping them out.

Nevertheless, there are some significant ethical concerns with using AI in telemarketing and customer service that we cannot ignore. One issue is that AI might lack the human touch. Sure, it can chat like a human, but it cannot certainly understand emotions like a human person can. This might make customers feel like they are not being listened to or understood. Another worry is about keeping customer data safe and private. AI needs a ton of data to work well, which could be risky if it is not appropriately protected. Companies need to make sure they are following strict rules, like GDPR, to keep customer info safe from hackers.

Plus, there is a risk that AI might make unfair decisions, like treating some customers differently because of biases in the data it is trained on. To solve this problem, companies need to be essentially open about how their AI works and make sure it is treating everyone fairly. So, to tackle these ethical issues, we need some legal rules in place. We could set clear standards for how AI should be developed and used in telemarketing and customer service. This means making sure it is transparent, fair, and accountable.

Regulators also need to keep a close eye on how companies handle customer data. They should ensure everyone follows the rules to protect people's privacy. Companies might have to do assessments to see if using AI might put people's data at risk, and they should ask for permission before collecting any personal info.

To add, companies need to train their employees on how to use AI responsibly. This means teaching them how to spot biases, make ethical decisions, and use AI in a way that's fair to everyone. Ultimately, using AI in telemarketing, telesales, and customer service could improve things for everyone. Nevertheless, we must be careful and make sure we are doing it in a way that respects people's rights and security.

US' FCC's Notice of Inquiry as an Exemplar

The recent Notice of Inquiry (NOI) [1] by the Federal Communications Commission (FCC) of the United States about how AI affects telemarketing and tele-calling under the Telephone Consumer Protection Act (TCPA) is a significant step undertaken by a governmental organisation in the United States of America to make it an imperative for governments worldwide to formulate legislations to regulate usage of AI in telemarketing and customer service. It shows that they are taking a serious look at how technology is changing the way we communicate. As businesses use AI more in things like customer service and marketing, it is crucial to understand the rules and protections that need to be in place.

The TCPA was initially made to prohibit bothersome telemarketing calls, but now it has to deal with the challenge of regulating AI-powered communication systems. With AI getting better at sounding like humans and having honest conversations, there is worry about whether these interactions are actual or legal. The FCC's inquiry is all about figuring out how AI fits into the rules of the TCPA and what kind of impact it might have, both good and bad.

One big thing the FCC is looking into is how genuine AI-generated voices sound in telemarketing calls. Unlike old-style robocalls that sound pretty robotic, AI calls can sound just like real people, which could trick folks into thinking they are talking to a person. This means we need rules to make sure AI calls are honest and accountable. Things like adding watermarks or disclaimers could help people know they are talking to a machine.

The FCC is also thinking about how AI chatbots fit into the rules. These are like little computer programs that can chat with customers through text. As more businesses use these chatbots, we need to know if they fall under the same rules as voice calls. Getting clear on this is essential for making sure customers are protected.

However, it is not all bad news. The FCC knows that AI can also make things better for consumers. It can help send personalised messages, ensure companies do not call people who do not want to be called, and even help people with disabilities access services more efficiently. Still, there is a risk of activities like scams or tricking people happening.

To figure all this out, startups and the government must work together to make reasonable rules. This means deciding what counts as AI, enshrining what it can and cannot do, and ensuring it is used correctly. It is also essential to teach people, especially those who might be more vulnerable, like elderly citizens, those who do not speak English well, or those who are not as literate as others, how to spot and deal with AI communications.

The FCC's Notice of Inquiry about how AI affects the TCPA has indeed got people talking about using AI in telemarketing. Since AI can sound just like humans, we need to update the rules to keep up. Some ideas include ensuring trusted sources are evidently marked, adding disclaimers to AI calls, and figuring out exactly how AI fits into the TCPA.

It is all about finding a balance between letting new tech like AI grow and ensuring people are safe. Startups and governments need to work together to ensure AI is used in telemarketing fairly and ethically. This means ensuring it does not get used to trick or scam people. Therefore, by working together, we can ensure tele-calling services keep improving without risking people's trust or safety.

AI Use Cases in Telemarketing, Telesales & Customer Service

The launch of Krutrim by Ola CEO Bhavish Aggarwal's Krutrim Si Designs (an AI startup) marks a significant step in integrating AI into telemarketing and tele-calling. With its multilingual capabilities and personalized responses, the chatbot demonstrates the potential of AI to revolutionise customer service in diverse linguistic contexts. However, the development of AI-powered chatbots also raises ethical considerations, particularly regarding biases in AI models [2].

Union Minister Ashwini Vaishnaw's statements on the recently stated AI Advisory by the Ministry of Electronics and Information Technology underscore the importance of addressing biases in AI models to ensure fair and unbiased interactions with users. In the context of telemarketing and tele-calling, where AI systems may interact directly with customers, it becomes crucial to implement legal safeguards and guardrails to prevent biases and discrimination. Legal solutions could include mandates for rigorous testing and validation of AI algorithms to detect and mitigate biases and regulations requiring transparency and accountability in AI deployment. Additionally, government entities could collaborate with startups and industry stakeholders to establish ethical guidelines and standards for AI integration in customer service, promoting fairness, inclusivity, and ethical conduct in AI-driven interactions. By proactively addressing ethical considerations and implementing legal safeguards, businesses and government entities can harness the benefits of AI in telemarketing and tele-calling while upholding fundamental principles of fairness and non-discrimination.

Also, in July 2023, the news of Dukaan (Bengaluru-based startup by Sumit Shah) replacing its customer support roles with AI chatbots called Lina, came to light, highlighting the growing trend of AI integration in customer service functions, including telemarketing and tele-calling. While AI-driven solutions offer efficiency and cost savings for startups like Dukaan, they also raise ethical considerations and potential legal challenges. As AI technology advances, concerns about job displacement and the impact on human workers become increasingly relevant [3].

Legal safeguards and guardrails must be established to ensure fairness, transparency, and accountability in deploying AI in telemarketing and customer service. These safeguards may include regulations governing the responsible use of AI, guidelines for ethical AI deployment, and mechanisms for addressing biases and discrimination in AI algorithms. Additionally, collaboration between startups, government entities, and industry stakeholders is essential to develop comprehensive legal frameworks that balance the benefits of AI innovation with the protection of workers' rights and consumer interests. By proactively addressing these ethical and legal considerations, startups can harness the benefits of AI while mitigating potential risks and ensuring compliance with regulatory requirements.

The increasing adoption of AI and automation in the retail sector, as highlighted by the insights provided, underscores the transformative potential of these technologies in enhancing [3] customer experiences and operational efficiency. However, as retailers integrate AI into telemarketing, telesales, and customer service functions, it is imperative to consider the ethical and legal implications [4].

Legal safeguards and guardrails must be established to ensure AI-powered systems adhere to regulatory frameworks governing customer privacy, data protection, and fair practices. This includes implementing mechanisms to safeguard personally identifiable information (PII) and ensuring transparent communication with customers about using AI in customer interactions. Moreover, ethical considerations such as algorithmic bias and discrimination need to be addressed through responsible AI governance frameworks. Companies should prioritize fairness, accountability, and transparency in AI deployment and establish protocols for addressing biases and ensuring equitable treatment of customers.

Additionally, regulations may need to be updated or expanded to address the unique challenges posed by AI in customer service contexts. This could involve mandates for AI transparency, algorithmic accountability, and mechanisms for auditing and oversight. By addressing these ethical and legal considerations, startups and government entities can harness the benefits of AI while ensuring that customer interactions remain ethical, fair, and compliant with regulatory requirements.

Possible Legal Solutions, Suggested

The idea of employing Artificial Intelligence (AI) in telemarketing and tele-calling brings both excitement and apprehension for businesses. While AI-powered chatbots have the potential to revolutionize customer service by enhancing efficiency and personalization, concerns persist regarding data privacy, bias, and potential job displacement. In this rapidly evolving landscape, it is imperative for businesses to strike a balance between innovation and responsibility by integrating legal safeguards and ethical considerations.

Data privacy and security stand out as primary concerns in utilizing AI for telemarketing. To address this, businesses must ensure compliance with data protection regulations applicable in their respective countries. This entails transparent communication with customers regarding data collection, processing, and storage, along with obtaining consent for AI-driven interactions. By implementing robust measures to safeguard customer data, businesses can foster trust and mitigate the risk of data breaches [4].

Another critical consideration is the presence of bias in AI systems. AI algorithms can inadvertently reflect biases inherent in the data they are trained on, resulting in unfair treatment of specific demographic groups. To address this, businesses should integrate bias detection and correction tools into their AI systems. Regular audits conducted by third-party organizations can help identify and rectify biases, while ongoing training can enhance the accuracy and fairness of AI responses. By tackling bias in AI, businesses can ensure that their tele-calling operations are impartial and equitable for all customers.

Job displacement is also a concern associated with AI in telemarketing. While AI has the potential to automate various tasks, businesses must ensure that it complements human capabilities rather than replacing human workers. This could involve fostering collaboration between AI and human agents, offering training and upskilling initiatives for call center agents, and establishing guidelines for responsible AI deployment in the workplace. By empowering employees to embrace new technologies and roles, businesses can alleviate the impact of AI on jobs and foster a more inclusive workforce.

In addition to legal safeguards, ethical considerations should guide the integration of AI into telemarketing and tele-calling operations. Businesses must prioritize ethical AI development and deployment practices, ensuring that their AI systems uphold principles such as transparency, accountability, and fairness. This may entail establishing ethical guidelines for AI use, conducting regular ethical assessments, and involving stakeholders in decision-making processes. By embedding ethical considerations into their AI strategies, businesses can build trust with customers and stakeholders and demonstrate their commitment to responsible innovation.


To conclude, the adoption of AI in telemarketing and tele-calling holds promise for enhancing customer service and operational efficiency. However, businesses must implement robust legal safeguards and ethical considerations to harness these benefits while mitigating risks. By prioritizing data privacy, addressing bias, mitigating job displacement, and integrating ethical principles into their AI strategies, businesses can navigate the complexities of AI integration and drive positive outcomes for both customers and employees.


[1] Frank Nolan et al., Tech & Telecom, Professional Perspective - FCC Issues Notice of Inquiry for AI’s Changing Impact on the TCPA professional-perspective-fcc-issues-notice-of-inqui (last visited Mar 12, 2024).

[2] Amazon Pay secures payment aggregator licence; Krutrim AI’s chatbot, The Economic Times,  licence-krutrim-launches-chatgpt-rival/articleshow/108016633.cms (last visited Mar 15, 2024).

[3] Asmita Dey, AI Coming for Our Jobs? Dukaan Replaces Customer Support Roles with AI Chatbot, The Times of India, Jul. 11, 2023, customer-support-roles-with-ai-chatbot/articleshow/101675374.cms.

[4] Sujit John & Shilpa Phadnis, How AI & Automation Are Making Retail Come Alive for the New Gen, The Times of India, Feb. 7, 2024, are-making-retail-come-alive-for-the-new-gen/articleshow/107475869.cms.


Unless otherwise specified, the opinions expressed in the articles published by Visual Legal Analytica, the digital publication are those of the authors. They do not reflect the opinions or views of Indic Pacific Legal Research LLP or its members.

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