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Colorado General Assembly passes artificial intelligence consumer protection bill

The Colorado General Assembly has passed a bill, SB 205, that would establish basic guardrails when companies use artificial intelligence to make high-stakes decisions about consumers and workers. If signed by Governor Jared Polis, it would be the first law in the nation to create consumer protections for high-risk AI used in a wide range of circumstances.

“By providing consumers with explanations of AI-driven decisions, and by giving them the right to correct information and appeal those decisions, this bill is a step in the right direction. But it will need to be aggressively enforced to ensure that companies comply, and to deter bad faith interpretations,” said Grace Gedye, policy analyst for Consumer Reports. “The real measure of this legislation, if it’s enacted, will come years down the road. That’s when we will see whether consumers can easily make use of their new rights.” 

Under this bill, if companies use artificial intelligence as a substantial factor in deciding access to employment, housing, financial or lending services, essential government services, health care services, education enrollment, insurance, or legal services, they would have a legal duty to use reasonable care to protect consumers from known or reasonably foreseeable risks of algorithmic discrimination, among other provisions. 

When Coloradans are subject to high-stakes decisions made or substantially influenced by artificial intelligence, this legislation would give them some new rights. Starting in 2026, consumers and workers would receive a notice before high-risk AI is used to make a decision about them, and if the decision is adverse, consumers would receive an explanation. They would have the right to correct any incorrect personal information the high-risk AI system relied on, and the right to appeal the decision.

If enacted, the law would be enforced by Colorado’s Attorney General, which would also have the authority to issue regulations. 

CR recently published an AI policy guide that outlines our key positions and recommendations for policymakers. 

Contact: Cyrus Rassool, cyrus.rassool@consumer.org