{"id":75437,"date":"2025-10-23T11:26:13","date_gmt":"2025-10-23T10:26:13","guid":{"rendered":"https:\/\/www.cxtoday.com\/?p=75437"},"modified":"2025-10-23T11:26:13","modified_gmt":"2025-10-23T10:26:13","slug":"why-ai-disclosure-could-make-or-break-customer-trust","status":"publish","type":"post","link":"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/","title":{"rendered":"Why AI Disclosure Could Make or Break Customer Trust"},"content":{"rendered":"

As enterprises race to integrate artificial intelligence into customer service, the technology\u2019s financial potential might be undercut by a growing trust deficit.<\/p>\n

While AI promises financial benefits and efficiency, the cost of poor implementation could outweigh the savings for enterprises relying on customer calls as revenue lifelines.<\/p>\n

When callers realize they\u2019re speaking to AI, the average call abandonment rate jumps from around four percent with human agents to nearly 25 percent with disclosed AI, according to Answering Service Care\u2019s AI Call Report<\/a>. That\u2019s a difference that could cost businesses millions in lost revenue and reputation.<\/p>\n

Transparency Matters More Than Technology<\/h2>\n

\u201cPeople want to talk to people, or at least know when they\u2019re not,\u201d Logan Shooster<\/strong>, VP of Answering Service Care<\/strong>, told CX Today in an interview.<\/p>\n

\u201cThe best course of action if you\u2019re going to use AI is to at least disclose that it is AI. And [say] here are your options\u2014you can get a human if you want it, or you can get a call back or an email so that the person can get help.\u201d<\/p><\/blockquote>\n

That desire for transparency is overwhelming. 80 percent of the respondents to the survey wanted to know if they\u2019re talking to AI. \u201cSo not necessarily that they don\u2019t want to talk to AI, but if they are talking to AI or forced to be dealing with AI, they want to know,\u201d Shooster said.<\/p>\n

The data shows how fragile trust from consumers can be.<\/p>\n

\u201cA third of them will hang up immediately if they do know it’s AI, so they won\u2019t even try to solve the problem.\u201d<\/p><\/blockquote>\n

Generational differences exist, but the core sentiment holds steady. \u201cBoomers were the most prone to hang up immediately and want to talk to a human, whereas Gen Z and below were more adept to potentially deal with AI,\u201d Shooster said.<\/p>\n

\u201cBut still, the overwhelming majority of people across generations, across political lines, all want to know at the core, \u2018Is it a human or not?’ And then if it’s not, ‘What are my options? Can I get to a human? Am I stuck with an AI? What’s the process to escalate?\u2019\u201d<\/p>\n

Shooster warned that businesses are too often focused on cutting costs, without fully considering the risks. Across millions of calls, human agents maintain average abandonment rates between 3 percent and 5 percent, whereas rates for disclosed AI calls spike close to 30 percent, Shooster said.<\/p>\n

\u201cSo yeah, maybe you\u2019re saving 50 percent on the labor assets, still, if you\u2019re losing one out of every three leads to your competitor… it\u2019s not even close.\u201d<\/p><\/blockquote>\n

For small businesses, such as HVAC, plumbing, real estate and personal injury firms, the cost can be devastating. \u201cEach one of those calls could be $15,000, $30,000 a pop,\u201d Shooster said.<\/p>\n

And beyond the direct financial cost, there\u2019s the longer tail of reputational damage from negative reviews on social media.<\/p>\n

\u201cA lot of these businesses are word-of-mouth and referral-type businesses and I can imagine lots of these businesses having people talking on Facebook and all different types of groups [saying], \u2018Hey, don\u2019t use them. You can\u2019t get support. It\u2019s horrible; they don\u2019t care. There\u2019s nobody you can talk to,\u2019\u201d Shooster said.<\/p>\n

\u201cThat\u2019s the indirect impact that you don\u2019t see on your bottom line, but it is impacting your brand and your reputation.\u201d<\/p>\n

The company\u2019s findings highlight a disconnect between how quickly AI is being adopted and how slowly regulation and consumer confidence are catching up. \u201cIt\u2019s kind of Wild, Wild West across the world, but especially in the U.S.,\u201d Shooster said. \u201cThe technology is moving faster than legislation, and consumers are the ones who have to deal with it.\u201d<\/p>\n

With AI systems often retaining and processing user input for training, enterprises need to think carefully about what that means for customer data protection, Shooster said.<\/p>\n

\u201cIf you’re talking to AI, not only is it not a human, but also everything you say is being stored and then trained on and then reused, and then who knows where it’s ending up.”<\/p><\/blockquote>\n

\u201cWe’re not completely anti-AI\u2014obviously there’s a place for technology, and it’s not going anywhere, but it’s good to know what you’re talking to and what’s going to happen the information that you’re sharing.\u201d<\/p>\n

Businesses would do well to take a similar approach to compliance with U.S. call recording disclosure laws, which vary by state. Some require only one party\u2019s consent, while others mandate that both parties be informed.<\/p>\n

In practice, the call center industry tends to take the cautious route, following the strictest \u201ctwo-party\u201d disclosure standards to ensure compliance everywhere. The logic is simple: always disclose when a call is being recorded to avoid legal gray areas and stay on the safe side of regulation.<\/p>\n

\u201cMaybe they are thinking about their customer. But have they really stopped and looked at where their policies are today\u2026 when it comes to the proper disclosures, the proper registrations, the proper laws?\u201d<\/p><\/blockquote>\n

Shooster pointed to states like California, Colorado, and Texas that have already begun passing AI transparency laws, as well as the proposed Keep Call Centers in America Act<\/em> that could tie AI disclosure to job protection.<\/p>\n

\u201cThere are a lot of things happening right now from a legislation standpoint even though it’s not where we’d like to see it,\u201d Shooster said, adding that specific AI laws may come into effect in the future. \u201cBusinesses should think about that before they\u2019re implementing technology.\u201d<\/p>\n

Answering Service Care has proposed a simple fix: make AI disclosure the default, along with a dose of honesty.<\/p>\n

\u201cPotential disclosure could look like when you call in, the AI would respond, \u2018You\u2019re speaking with an AI assistant today. I\u2019ll do my best to answer your questions quickly,\u2019\u201d Shooster said. \u201cAt least now they know, from an ethical standpoint, from a privacy concern.\u201d<\/p>\n

That level of transparency helps businesses because “it lets the technology slow down and get better before we just roll it out to everything because it may save a few dollars,\u201d Shooster said. It also \u201chelps avoid any potential financial compliance risks by breaking laws they probably don\u2019t even know about.\u201d<\/p>\n

Building Customer Trust in AI Rollouts<\/h2>\n

A lack of strategic planning and feedback loops around AI implementations isn\u2019t unique to the U.S.<\/p>\n

A recent report<\/a> from ArvatoConnect found that many firms in the U.K. are rolling out AI and digital projects without proper planning, feedback, or measurement. Just 53 percent had gathered end-user insight before making changes, and the same number hadn\u2019t sought feedback after rollout.<\/p>\n

In addition, around 60 percent had failed to gain colleague buy-in, and only 56 percent had trained their employees on the new systems. Even more concerning, 38 percent had yet to implement performance monitoring, and 50 percent hadn\u2019t set KPIs to track success.<\/p>\n

Shooster echoed that sentiment, arguing that feedback and testing are essential before any rollout.<\/p>\n

\u201cYou need to get customer feedback when you roll things out, and then iterate and then adapt from there and test. And not just do cold deploys of new things and hope it works. There does need to be a systematic approach to it.\u201d<\/p><\/blockquote>\n

Shooster added that introducing AI without purpose or process is where many companies go wrong. \u201cIt\u2019s about identifying the types of call types and workflows\u2026 identifying the whole process end to end, and then saying, where does a human need to be involved? Where could an AI potentially be involved? And most importantly, what does the customer think?\u201d<\/p>\n

Shooster acknowledged that AI can have a place \u2014 in limited, low-stakes scenarios, such as basic queries and or mass notifications for public announcements. \u201cBut there are other queries where you do need a human on the phone, instead of just forcing consumers to deal with AI for all different types of solutions.\u201d<\/p>\n

That distinction becomes crucial in high-stakes industries like emergency response, healthcare and finance. \u201cBecause when it’s a 911 call, which we went over in our results, an urgent medical issue, or even financial, with a lot of these IVRs you’re getting, you’re ending up at AI, and they’re not giving you the escape to get to a human. You’re stuck there, and you’re in loops and loops of agent,\u201d Shooster said.<\/p>\n

\u201cWhen it\u2019s wrong, AI has no idea. It\u2019ll be extremely confident that this is the answer. And then when called out, it\u2019ll change its opinion and say, \u2018Oh, you\u2019re right.\u2019 \u2026 Sometimes paying a little bit more to make sure that we aren\u2019t making those types of life-changing mistakes is worth it.\u201d<\/p>\n

That same need for balance between efficiency and empathy showed up across the Atlantic, too.<\/p>\n

According to 8×8\u2019s Streetview survey<\/a>, 83 percent of UK customers still prefer speaking with a real person, with just four percent favoring chatbots or virtual agents. The only time that sentiment shifted was when money entered the picture, as around one in three respondents said they\u2019d accept AI if it meant lower prices.<\/p>\n

\u201cMy recommendation is not to put it in front of potential new business opportunities, because at least for that small business, you can’t afford to impact your reputation with a new customer, because every single one of those is really important to the growth of your business.\u201d<\/p><\/blockquote>\n

Shooster added: \u201cI think for some support-related issues, it could make sense, again, based on feedback and testing. And then every business is different.\u201d<\/p>\n

In the end, the advice to business leaders is clear: slow down, disclose, and design with trust in mind. The key is to use AI deliberately, not desperately. \u201cIt\u2019s really about understanding what\u2019s important \u2014 is it short-term gains, or long-term gains?\u201d Shooster said. \u201cBecause loyalty and reputation are everything in the long run.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

As enterprises race to integrate artificial intelligence into customer service, the technology\u2019s financial potential might be undercut by a growing trust deficit. While AI promises financial benefits and efficiency, the cost of poor implementation could outweigh the savings for enterprises relying on customer calls as revenue lifelines. When callers realize they\u2019re speaking to AI, the […]<\/p>\n","protected":false},"author":11074,"featured_media":75466,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[11850],"class_list":["post-75437","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-contact-center","tag-ai-agents","tag-artificial-intelligence","tag-call-recording","brands_to_track-cx-today","editorial_type-interview","intent-evaluation","target_audience-industry-professional"],"acf":[],"yoast_head":"\nWhy AI Disclosure Could Make or Break Customer Trust - CX Today<\/title>\n<meta name=\"description\" content=\"CX Today covers Contact Center & Omnichannel\u200b news including AI Agents, Artificial Intelligence, Call Recording and more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why AI Disclosure Could Make or Break Customer Trust\" \/>\n<meta property=\"og:description\" content=\"CX Today covers Contact Center & Omnichannel\u200b news including AI Agents, Artificial Intelligence, Call Recording and more.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/\" \/>\n<meta property=\"og:site_name\" content=\"CX Today\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CXTodayNews\/\" \/>\n<meta property=\"article:published_time\" content=\"2025-10-23T10:26:13+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.cxtoday.com\/wp-content\/uploads\/2025\/10\/20251022-Call-disclosure-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"850\" \/>\n\t<meta property=\"og:image:height\" content=\"425\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Nicole Willing\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cxtodaynews\" \/>\n<meta name=\"twitter:site\" content=\"@cxtodaynews\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Nicole Willing\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/\"},\"author\":{\"name\":\"Nicole Willing\",\"@id\":\"https:\/\/www.cxtoday.com\/#\/schema\/person\/8e1bd49fc15db705ae5c169d08ebe3cc\"},\"headline\":\"Why AI Disclosure Could Make or Break Customer Trust\",\"datePublished\":\"2025-10-23T10:26:13+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/\"},\"wordCount\":1663,\"publisher\":{\"@id\":\"https:\/\/www.cxtoday.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.cxtoday.com\/wp-content\/uploads\/2025\/10\/20251022-Call-disclosure-1.jpg\",\"keywords\":[\"AI Agents\",\"Artificial Intelligence\",\"Call Recording\"],\"articleSection\":[\"Contact Center & Omnichannel\u200b\"],\"inLanguage\":\"en-GB\",\"copyrightYear\":\"2025\",\"copyrightHolder\":{\"@id\":\"https:\/\/www.cxtoday.com\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/\",\"url\":\"https:\/\/www.cxtoday.com\/contact-center\/why-ai-disclosure-could-make-or-break-customer-trust\/\",\"name\":\"Why AI Disclosure Could Make or Break Customer Trust - 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