Attorney General Kamala D. Harris, District Attorneys Announce $8.5 Million Settlement With Wells Fargo Bank Over Privacy Violations
LOS ANGELES - Attorney General Kamala D. Harris and five district attorneys today announced a $8,500,000 settlement with Wells Fargo Bank over privacy violations that included recording consumers’ phone calls without timely telling consumers they were being recorded, as required by California law. The investigation into Wells Fargo and the subsequent settlement were the result of the work of the Attorney General’s Office and the office of Los Angeles County District Attorney Jackie Lacey, along with the Consumer Protection Divisions of Alameda County District Attorney Nancy E. O’Malley, Riverside County District Attorney Michael Hestrin, San Diego County District Attorney Bonnie M. Dumanis and Ventura County District Attorney Gregory D. Totten.
As part of the settlement, which is in the form of a stipulated judgment, Wells Fargo will pay civil penalties totaling $7,616,000 and will reimburse the prosecutors' investigative costs of $384,000. In addition, Wells Fargo will contribute $500,000 to two statewide organizations dedicated to advancing consumer protection and privacy rights.
“Protecting the privacy of California consumers is increasingly crucial as technology rapidly develops and becomes a bigger part of our lives,” said Attorney General Harris. “This settlement holds Wells Fargo accountable for violating the privacy of its customers by recording calls without providing adequate notification, and ensures that the bank makes the changes necessary to protect the privacy of its customers.”
The civil complaint, filed in Los Angeles Superior Court, alleged 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. California has some of strongest privacy laws in the country. In California, each party to a confidential conversation must be advised at the outset if a call is being recorded, so that the individual can object or terminate the call if he or she does not wish to be recorded.
In addition, the settlement agreement states that Wells Fargo must comply with California's standards for recording confidential communications between the bank and its customers by making clear, conspicuous, and accurate disclosures. Wells Fargo has also agreed to implement an internal compliance program to ensure that the policy changes are made. This is a significant step that is aligned with Attorney General Harris’ ongoing efforts to preserve California businesses’ ability to innovate while ensuring that consumers’ right to privacy is protected.
“Wells Fargo failed to recognize that Californians place a high value on privacy,” said Los Angeles County District Attorney Jackie Lacey. “Today’s settlement takes another step toward ensuring that consumers’ rights are protected.”
“The collaboration of the District Attorney’s Offices and the Attorney General resulted in today’s settlement,” said Alameda County District Attorney Nancy E. O’Malley. “As information technology reaches ever further into the lives of our citizens, strict compliance with California’s privacy laws becomes ever more imperative to protect the rights of those individuals.”
“Preserving an individual’s right to privacy is among the greatest challenges we face in the Digital Age,” said San Diego County District Attorney Bonnie M. Dumanis. “This settlement underscores our office’s commitment to protecting San Diego County consumers from intrusions and privacy violations in the marketplace.”
Once Wells Fargo was notified by investigators of the alleged deficiencies in their recording disclosures, the bank and its counsel worked cooperatively to implement changes in the company’s policies nationwide, without admitting liability.
In October 2015, Attorney General Harris reached a similar settlement with Houzz Inc., an online platform for home remodeling and design, to resolve allegations that the company violated California privacy laws by recording incoming and outgoing telephone calls without notifying all parties on the call that they were being recorded. The settlement required Houzz to appoint an individual to serve in a Chief Privacy Officer capacity to oversee Houzz’s compliance with privacy laws, marking the first time such a provision has been included in a California DOJ settlement. .
Copies of the complaint and stipulated judgment are attached to the online version of this release at www.oag.ca.gov.