Therapeutic AI and the Hidden Risks of Over-Disclosure: An Embedded AI-Literacy Framework for Mental Health Privacy

Abstract: LLMs are increasingly deployed in mental health contexts, from structured therapeutic support tools to informal chat-based well-being assistants. While these systems increase accessibility, scalability, and personalization, their integration into mental health care brings privacy and safety challenges that have not been well-examined. Unlike traditional clinical interactions, LLM-mediated therapy often lacks a clear structure for what information is collected, how it is processed, and how it is stored or reused. Users without clinical guidance may over-disclose personal information, which is sometimes irrelevant to their presenting concern, due to misplaced trust, lack of awareness of data risks, or the conversational design of the system. This overexposure raises privacy concerns and also increases the potential for LLM bias, misinterpretation, and long-term data misuse. We propose a framework embedding AI literacy interventions directly into mental health conversational systems, and outline a study plan to evaluate their impact on disclosure safety, trust, and user experience.