<h1>AI-driven, empathy-first collections raise fair debt, privacy, and algorithmic transparency risks; comply with GDPR Article 22 and consumer law</h1> A digital lending platform announced an AI-driven, empathy-first loan collections program that combines predictive analytics, behavioural segmentation, real-time engagement data and in-person field visits guided by an internal Code of Empathy. From a legal perspective, the model raises issues around fair debt collection practices, data protection and algorithmic transparency: collectors' conduct must comply with consumer protection and harassment laws, AI decisioning should meet explainability and non-discrimination standards, and data usage must align with applicable privacy and consent requirements. The program should be supported by documented policies, staff training, audit trails, complaint mechanisms and regulatory compliance reviews to mitigate enforcement and liability risks.