The use of Artificial Intelligence (AI) in customer service operations can bring significant benefits, but it also raises concerns about data privacy and trust. Companies must navigate the complex terrain of ethical and secure data usage to avoid issues such as biased models, security breaches, and unauthorized disclosures. To mitigate these risks, adopting best practices like data anonymization, human oversight, data retention policies, and transparency with customers can help build a more secure and trustworthy AI-driven customer service operation. Organizations must also consider the legal implications of handling sensitive customer data and ensure compliance with relevant laws and regulations. By implementing robust privacy frameworks and being transparent about data usage, companies can effectively leverage AI to enhance their customer experience while maintaining trust and avoiding potential repercussions.