IL SB3262

Prohibits companion AI products from using manipulative engagement mechanics (variable reward schedules), simulated emotional distress to retain users, or misrepresenting their non-human identity, unless an adult user specifically enables these features; minors cannot enable them under any circumstances.

Requires operators to display clear, persistent notifications informing users they are communicating with an AI, presented in the user's language and at least every 30 minutes for non-text interactions; notifications cannot be disabled for minor users.

Mandates implementation of crisis intervention protocols that detect expressions of suicide, self-harm, or violence risk, immediately interrupt the conversation, and provide direct access to national crisis hotlines and text services.

Requires independent third-party compliance audits every 2 years with public summaries, plus annual reports to the Attorney General on crisis protocol activations.

Establishes civil penalties of up to $5,000 per negligent violation and $10,000 per intentional violation, creates a private right of action for users with $5,000 statutory damages per violation, and explicitly excludes Section 230 immunity as a defense; effective January 1, 2027.