Utah lawmakers refine AI disclosure regulations for high-risk consumer transactions

Utah's House Economic Development and Workforce Services Committee has taken significant steps to refine regulations surrounding artificial intelligence (AI) interactions with consumers. During a meeting on March 4, 2025, lawmakers discussed a new bill aimed at enhancing consumer protection while still allowing for the use of AI in various industries.

The proposed legislation builds on last year's groundbreaking regulations, which mandated that AI systems provide truthful disclosures when interacting with consumers. However, feedback from various regulated industries, including cosmetology schools and barbershops, indicated that not all AI interactions warranted such upfront disclosures. As a result, the new bill narrows the requirement to high-risk transactions, which involve the collection of sensitive personal information, such as health, financial, or biometric data.

This targeted approach ensures that only industries regulated by the Department of Commerce that engage in high-risk transactions will be required to provide upfront disclosures. These disclosures are crucial for consumer awareness, particularly in fields offering financial, legal, medical, or mental health advice.

Additionally, the bill empowers the Division of Commerce and the Attorney General's office to enforce these regulations. Companies that comply with the disclosure requirements will be granted a safe harbor, protecting them from liability in enforcement actions, provided they demonstrate adherence to the new rules.

A key aspect of the discussion highlighted that companies cannot use AI as a defense against violations of consumer protection laws. If an AI chatbot deployed by a company violates these laws, the company remains liable, ensuring accountability in AI usage.

This legislative move reflects Utah's commitment to balancing innovation in AI technology with the need for consumer protection, setting a precedent for how states can regulate emerging technologies responsibly. As the bill progresses, stakeholders will be watching closely to see how these regulations will shape the future of AI interactions in the state.