AI Frontier Institute

AI chatbots; unfair or deceptive trade practice for failing to notify consumer about AI chatbot; private right of action and enforcement provided for

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Alabama HB325 (introduced Jan. 22, 2026, and pending in the House Judiciary Committee) has not been enacted. If enacted, it would require a person who engages in a commercial transaction or trade practice with a consumer through an AI chatbot, in textual or aural conversation where the consumer may reasonably believe they are talking to a human, to tell the consumer (verbally or in writing) that they are communicating with a computer, not a human. The notice would be required at the start of each interaction and at regular intervals during continuing interactions (Section 2(a)). Section 1 defines "chatbot" as a generative AI program that simulates conversation by text, audio, or visual medium. Failure to comply would be an unfair or deceptive trade practice (Section 2(b)). Section 3 would let an affected consumer sue for injunctive relief and for actual damages plus statutory damages of up to $1,000 per violation, with class action damages capped at $10,000,000. Section 4 would let the Attorney General sue to enjoin violations, seek civil penalties of up to $5,000,000 for a violation, and seek other remedies the court deems appropriate. Under Section 5, the act would take effect October 1, 2026.

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