PG&E Faces Lawsuit for AI Transcribing Customer Calls Without Consent

Five Californians sued PG&E for routing calls through AI transcription without disclosure.

Five California residents have initiated a class action lawsuit against Pacific Gas and Electric Company (PG&E) and PolyAI Technologies. The allegation: PG&E routed customer calls through PolyAI’s AI answering service called 'Peggy' that intercepted and transcribed calls without customers' consent or disclosure.

This AI system reportedly transcribed sensitive customer data, including Social Security numbers and financial details. Although PG&E disclosed that calls "may be recorded," it did not inform callers that a third-party AI was transcribing conversations. Plaintiffs describe the practice as "surreptitious, real-time wiretapping, eavesdropping upon, and recording of ordinary telephone calls."

The lawsuit seeks $5,000 for each privacy violation and demands a court order compelling PG&E and PolyAI to delete all recordings and transcripts generated from the intercepted calls.

PG&E serves over five million customers in northern California, with approximately 16 million calls to customer service lines annually, signifying a potentially large scope for privacy exposure.

This case aligns with a wider legal trend challenging AI deployment in customer service. For example, Pegasystems and U.S. Bank face similar class actions over AI transcription without consent, while Google is also under legal scrutiny for alleged AI call interceptions without proper disclosure.

These lawsuits underscore the increasing privacy and data protection issues emerging as AI systems are integrated into customer interactions, urging legal and compliance teams to revisit how consent and transparency are handled when using AI.