AB 925 Dies: Secret Recording Of Business-Customer Cell Phone Calls Remains A Crime
Update 5/29/2015: AB 925 died in the Assembly Appropriations Committee yesterday. Secret phone recording remains a crime under California law thanks to the hard work of a broad coalition of consumer, privacy, labor and other groups.
APRIL 28 – Big businesses will be secretly recording cell phone calls with customers, stripping away a privacy right that’s been long protected in California, if lawmakers approve Assembly Bill 925 (Low, D-Campbell). The bill faces its first test in the Assembly Public Safety Committee Tuesday, May 5. Consumer Federation of California (CFC) and 20 other groups are urging legislators to vote NO on AB 925.
Recording a phone conversation without notice and both parties’ consent is a crime in California, one of a dozen states that protect its residents against such spying. It’s easy enough to comply with the law, and nearly all businesses do. The familiar pre-recorded statement at the start of many calls to businesses that “this call may be recorded” is all it takes. A consumer hearing the message can hang up, or consent by continuing the call.
When a business secretly records a phone call it gains an unfair advantage over the consumer. A dispute may arise between the consumer and the business concerning a price quote, billing or payment arrangement, the product that is purchased or service that is ordered, the quality or reliability of the product or service, or a consumer’s agreement to pay for a transaction. The consumer and the business involved in the dispute may have different renditions of a phone call in which they discussed any of these topics.
In a dispute, a business that surreptitiously recorded the phone call can privately review the recorded conversation. If the secret recording supports the business’s version of the call, it may then inform the consumer that it recorded the disputed phone call, and then play it back – again, though, only if the recording is supportive of the business’s position. But if the business’s private internal review of the recorded phone call reveals that it discredits the business’s position in the dispute, it has no obligation to provide that information to the consumer. The business is free to destroy or conceal the recording. A consumer who was not informed that the call was recorded would have no knowledge of, or access to, the secret recording. A secret recording gives the business an ace up its sleeve that it plays only when it assists the business to the detriment of the consumer.
In upholding California law against clandestine phone recording a unanimous state Supreme Court wrote, “companies may utilize such undisclosed recording to further their economic interests – perhaps in selectively disclosing recordings when disclosure serves the company’s interest, but not volunteering the recordings’ existence (or quickly destroying them) when they would be detrimental to the company.” Kearney v. Salomon Smith Barney, Inc. (2006) 39 Cal. 4th 95 at 124-25.
Companies that have been held accountable in court under California law for making secret phone recordings include a subprime lender, debt collectors, a foreclosure business, a loan company, credit card issuers, a loan servicer, a hotel chain, health care providers, Las Vegas casinos, a security alarm company, an airline, and an automobile manufacturer. Several of these cases involved businesses secretly recording calls and harassing, badgering, or asking invasive questions of consumers, or selectively using clandestinely recorded information as a trump card in a subsequent consumer dispute.
A consumer is entitled to know whether a call may be recorded before divulging any information. Hearing an announcement that a call “may be recorded” can influence the consumer’s demeanor during the call. A consumer who is informed that a call is recorded may be more circumspect in expressing frustration with unfair treatment by a business. Knowledge of a recording may also influence the consumer’s willingness to be forthcoming with sensitive information, including providing credit card numbers and security codes, Social Security numbers, bank account information, medical conditions, prescriptions, personal attitudes, lifestyles, sexual preference, purchasing history and interests, and many other sensitive items.
Why does Assembly Member Evan Low want to eliminate this privacy right? Why should bill collectors, subprime lenders, landlords, student loan firms, retailers, health care businesses and every other commercial interest be empowered to make secret recordings of calls with California consumers?
Joining CFC in opposition to AB 925 are privacy, consumer, labor, senior, civil liberties, immigrant rights and student advocacy groups, including: ACLU of California; California Association of Retired Americans; California Competes; California Nurses Association ; Communications Workers of America; Consumer Action; Consumers for Auto Reliability and Safety; Consumers Union; Elder Financial Protection Network; Older Woman’s League; Privacy Rights Clearinghouse; Public Advocates; Rural Legal Assistance of Northern California; The Utility Reform Network (TURN); United Food and Commercial Workers Western States Council; University of San Diego Center for Public Interest Law; and World Privacy Forum.
- Read CFC’s detailed analysis of AB 925 here.
- Read a letter of opposition signed by 24 organizations here.
- Coverage on Reuters: Firms could record some phone calls without consent under California bill
- San Francisco Chronicle editorial: Phone privacy under assault (scan here)
Tags: 2015 Legislation, AB 925, CFC, Evan Low, Payday Loans, Predatory Lending, Privacy, Student Loans, The Utility Reform Network