Attorney General Kamala D. Harris Announces Settlement with Houzz, Inc. Over Privacy Violations

LOS ANGELES - Attorney General Kamala D. Harris today announced a 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.

From March 2013 to September 2013, Houzz’s Irvine office secretly recorded calls that were intended for training and quality-assurance purposes.  Although most of the secretly recorded calls were with home improvement and remodeling professionals, Houzz also recorded customer calls and employees’ personal calls.  Houzz did not notify all parties or obtain consent, in violation of state laws against wiretapping and eavesdropping.  The proposed settlement, filed in Santa Clara Superior Court today, resolves Attorney General Harris’s allegations.

“Houzz violated the trust of its professionals, customers, and employees by recording calls without permission,” said Attorney General Harris.  “This settlement holds Houzz accountable for violating state privacy laws and ensures that the company will stop recording calls without permission.”

After being notified by the California Attorney General’s Office in September 2013, Houzz stopped recording calls and voluntarily cooperated with the investigation. 

The settlement, which is in the form of a stipulated judgment, will require Houzz to appoint an individual to serve in a Chief Privacy Officer capacity who will oversee Houzz’s compliance with privacy laws and shall report any significant concerns to the Chief Executive Officer and/or other senior executives. 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.

Under the settlement, Houzz must also conduct a privacy risk assessment addressing its efforts to comply with applicable privacy laws governing its U.S. operations. The privacy risk assessment will evaluate issues that are implicated by Houzz’s business processes, use of technology, and processes related to any business partners with whom Houzz shares personal information, as well as Houzz’s efforts to mitigate or avoid any adverse effects on individuals in the United States. 

Houzz is also required to secure the recordings and destroy them and pay $175,000.

Copies of the complaint and stipulated judgment are attached to the online version of this release at www.oag.ca.gov.