SAN DIEGO–District Attorney Bonnie Dumanis says today that her office’s Consumer Protection Unit, working with the consumer protection units of the Los Angeles, Riverside, Ventura and Alameda District Attorneys’ Offices and the California Attorney General’s Office, has settled an $8,500,000 lawsuit against Wells Fargo Bank, N.A.
The civil complaint, filed in Los Angeles Superior Court, alleges that Wells Fargo violated sections 632 and 632.7 of the California Penal Code by failing to timely and adequately disclose its automatic recording of phone calls with members of the public. Laws in California regarding the recording of phone calls are more stringent than in many other states. In California, each party to a confidential conversation must be advised at the outset if a call is being recorded, so that any party can object or terminate the call if he or she does not wish to be recorded.
“Preserving an individual’s right to privacy is among the greatest challenges we face in the Digital Age,” said DA Dumanis. “This settlement underscores our office’s commitment to protecting San Diego County consumers from intrusions and privacy violations in the marketplace.”
Once notified by the prosecutors’ offices of the alleged deficiencies in their recording disclosures, Wells Fargo and its counsel worked cooperatively to implement changes in the bank’s policies nationwide. As part of the settlement agreement with the six prosecutors’ offices, Wells Fargo must comply with California’s standards for recording confidential communications between the bank and its customers by making a clear, conspicuous, and accurate disclosure to any consumer of the fact of the recording at the beginning of any such communication. Wells Fargo has also agreed to implement an internal compliance program to ensure that the policy changes are made.
Under the terms of the court-approved judgment, which was entered without admission of liability, Wells Fargo will pay civil penalties totaling $7,616,000 and will reimburse the prosecutors’ investigative costs of $384,000. (San Diego County DA will receive one-sixth, or $1,269,333.33, of those civil penalties and $64,000 of the costs). All of the penalties must by law be used for future consumer protection work.
In addition to the penalties and investigative costs, Wells Fargo will contribute $500,000 to two statewide organizations dedicated to advancing consumer protection and privacy rights.