Wells Fargo Bank, N.A., will pay $8.5 million to settle a civil lawsuit that alleges it waited too long to inform customers that phone calls were being recorded.
The San Francisco-based company reached a settlement with the Los Angeles County District Attorney’s Office, as well as the California Attorney General and the Alameda, Riverside, San Diego and Ventura county district attorney’s offices.
The civil complaint, filed in Los Angeles County Superior Court, alleges that Wells Fargo violated California Penal Code sections 632 and 632.7 by failing to timely and adequately disclose its automatic recording of phone calls with members of the public.
“Wells Fargo failed to recognize that Californians place a high value on privacy,” Los Angeles County District Attorney Lacey said. “Today’s settlement takes another step toward ensuring that consumers’ rights are protected.”
California law regarding the recording of phone calls is more stringent than in many other states.
Each party to a confidential conversation must be advised at the outset if a call is being recorded, so the person may object or terminate the call if he or she does not wish to be recorded.
Once notified by prosecutors of the alleged deficiencies in their recording disclosures, Wells Fargo worked cooperatively to implement changes in the bank’s policies nationwide without admitting liability.
As part of the settlement agreement, Wells Fargo must comply with California’s standards for recording confidential communications between the bank and its customers by making a clear and accurate disclosure to any consumer of the fact of the recording at the beginning of any such communication.
Wells Fargo also agreed to implement an internal compliance program to ensure that the policy changes are made.
Under the settlement terms, Wells Fargo will pay civil penalties totaling $7.61 million and will reimburse the prosecutors’ investigative costs of $384,000.
All of the penalties must by law be used for future consumer protection work.
Wells Fargo also will contribute a total of $500,000 to the Consumer Protection Prosecution Trust Fund and the Privacy Rights Clearinghouse, statewide organizations dedicated to advancing consumer protection and privacy rights.