Can you trust AI customer service bots with your data?

You’ve probably experienced it: You reach out to a company with a question, and before you can type “representative,” you’re chatting with a bot. It responds quickly, remembers your last order, and even apologizes when things go wrong.

It’s faster customer support, as 33% of customers noticed, according to Akeneo data. But while AI customer service is convenient, it can also raise concerns about how much personal data these bots are seeing, and where it all goes.

As data privacy in AI customer service becomes a hot-button issue, you may be wondering if you can really trust that chatbot on the other end of the screen.

Let’s break down what’s really going on behind those AI-powered replies and what you can do to stay safe.

How AI customer service bots handle your data

AI in customer service often involves large-scale data processing. So, even if AI is helpful, it can collect more than a tracking number.

Customer service chatbots may collect a variety of information, including:

• Your name, email address, and phone number
• Purchase history and browsing behavior
• Location data
• Sensitive data, like billing information or passwords (if shared)

These bots learn through machine learning, which uses previous interactions to improve future conversations. But in doing so, the AI customer service system stores data — sometimes indefinitely — and can share it across departments or even third parties.

In many cases, data is stored on cloud servers, which may have vulnerabilities or be subject to data breaches. That’s where things can get risky.

The risks of sharing personal info with AI bots

So what happens when your personal info ends up in an AI database? In a perfect world, nothing. But in reality, your data privacy may not be as secure as you’d hope.

Data breaches

AI systems are only as safe as the servers they run on, and those servers can get hacked by cybercriminals. Data breaches are an unfortunate reality, the more we live and share our information online.

Take, for example, Discord’s customer data breach that happened in October 2025. One of Discord’s third-party customer service providers was compromised, and cybercriminals gained access to information from users who had contacted Discord through customer support. The cybercriminals got their hands on customer data, including names, emails, and even a few ID images.

The problem with data breaches is the potential aftermath of the attack. Compromised data can be sold on the dark web and used for identity theft, fraud, or targeted phishing scams.

Misuse of information

Even without a breach, data shared with bots can be misused. Many AI systems are connected to broader customer profiles that companies use for marketing or analytics. So if you chat with a bot about a product, don’t be surprised if you’re retargeted with ads the next day. Of course, many apps and websites ask for consent before tracking your information, but that’s not always the case.

Some bots may also share your information with third parties without you fully realizing it. It’s not always apparent, but you can check the privacy policy and terms and conditions before engaging with a website. It's especially troubling when third parties might share your personally identifiable information (PII), such as birth dates or mailing addresses, without you being fully aware.

Lack of transparency

Perhaps the biggest issue with AI in customer service is the lack of transparency. You often have no idea how your data is being handled.

Most AI platforms don’t disclose where your data is stored, how long it’s kept, or who has access to it. And even when they do, it’s not always simple to navigate the privacy policy and understand exactly what things mean.

This lack of clarity creates privacy concerns with AI. As companies increasingly use AI-powered customer support without clear safeguards in place, customers are more at risk. (Recall the Discord case we discussed earlier, in which cybercriminals successfully hacked a third-party used for customer service.)

When AI bots can be trusted

Some AI bots are built with privacy in mind. If a company is transparent about its privacy practices, uses end-to-end encryption, and complies with laws like GDPR (Europe) or CCPA (California), you’re in better hands.

Trustworthy bots also serve low-risk functions, like tracking orders, providing store hours, or answering FAQs. What you want to avoid is sharing sensitive data, like account numbers or login credentials, through a bot unless you’re certain it’s secure.

Some companies like Apple and Signal have taken a proactive stance, focusing on minimizing data collection in their AI systems.

How to chat with AI without risking your privacy

Sometimes, you have no better way to contact customer service than through a chatbot.

Here’s how to help protect your sensitive data while still getting support:

• Don’t share sensitive info: Never type in your SSN, credit card number, or passwords in a chat.
• Use official channels: Only use bots on the company’s official website or app, not via links in emails or texts.
• Check for HTTPS: Look for the padlock icon in the URL bar. It means the site uses secure encryption.
• Read the bot’s intro: Some bots disclose how they handle your info. Read it before you chat.
• Log out afterward: Do this always, especially if you’re using a public or shared device.
• Avoid clicking links: Bots should not send strange links or ask you to engage outside the website. If they do, it could be an AI scam.

Protect your data in an AI-powered world

The truth is, AI for customer service isn’t going anywhere since it’s fast, efficient, and cheaper for businesses. But that doesn’t mean you should throw caution to the wind.

Data privacy in AI customer service should matter to anyone who’s ever typed “I forgot my password” or “Where’s my refund?” into a chat window. Stay informed. Be cautious with what you share. And when in doubt, assume that what you say might be saved or shared.

Even with precautions, your information can still be exposed. LifeLock adds a layer of defense by monitoring your personal information for signs of misuse and alerting you quickly if your data appears where it shouldn't, helping you respond before damage is done.