As Use of AI Chatbots Rises, so Do the Number of Customer Complaints

Telecommunications companies are employing AI technology more than ever before, but customers are less than happy.

"Because it's the law," is the answer we often get when there are questions about social security. Prostock-studio/Shutterstock

Artificial intelligence (AI) chatbots are struggling to deal with customer complaints as they become increasingly utilised by company call centres.

The use of AI chatbots in Australia is only set to grow, according to data showing an exponential rise in the use of the emerging technology.

Global management consulting firm IMARC estimates a 22.3 percent growth rate in the Australian chatbot market between 2025 and 2033, driven in part by a rising demand for all-hours support.

In 2024, the Australian chatbot industry was estimated at a total worth of $291.9 million (US$194.6 million), predicted to reach a value of more than $2 billion by 2033.

But Centre for Artificial Intelligence and Digital Ethics co-founder Professor Jeannie Peterson told AAP AI struggles with tricky customer complaints and may add to human frustration.

“It takes too long for the chatbot to say it does not know,” she said.

“Customers may also be frustrated by the need to constantly repeat the complaint when moving between chatbot and human.”

Professor Reeva Lederman from the University of Melbourne also told AAP that people often became overly annoyed when they struggled to get their complaint through to a human via a chatbot, and could easily feel “caught in a loop.”

A virtual friend is seen on the screen of an iPhone in Arlington, Virginia, on April 30, 2020. Olivier Douliery/AFP via Getty Images

AI Rollout

In 2024, Australia’s largest telecommunications provider, Telstra, announced it was adopting “promising” AI methods that the company vowed would improve the customer experience.

Telstra Group Executive Product and Technology Kim Krogh Andersen lauded the move to AI, declaring it “a profound juncture in a new era of transformation.”

The nation’s second-largest telco, Optus, has also implemented a range of AI features, including its chatbot Concierge.

The investment in AI has paid off for Optus, with a 15 percent reduction in human-customer interaction reported.

But as the chatbots rise, complaints with telecommunications providers are also markedly up.

A recent report by the Australian Communications and Media Authority (ACMA) shows 7.1 percent of customer complaints were referred to the Telecommunications Industry Ombudsman (TIO), up from 6.9 percent in the previous quarter.

It is the third quarter in a row where rates of customer complaints have increased.

“The data shows that some telcos need to do a lot more to address complaints so that customers don’t have to escalate the matter to the TIO to have it fixed,” ACMA’s Samantha Yorke said.