DA Settles Lawsuit with Wells Fargo over Privacy Violations

Oakland, CA – Alameda County District Attorney Nancy E. O’Malley announced today that her Office’s Consumer Protection Division, along with Los Angeles, Riverside, Ventura and San Diego District Attorneys’ Offices and the California State Attorney General’s Office, has settled a $8,500,000 lawsuit against Wells Fargo Bank alleging a violation of California’s privacy laws.

Under the terms of the court approved judgment, Wells Fargo will pay civil penalties totaling $7,616,000 and will reimburse the prosecutors' investigative costs of $384,000.

In addition to the above penalties and investigative costs, Wells Fargo will contribute $500,000 to two statewide organizations dedicated to advancing consumer protection and privacy rights.

“The collaboration of the District Attorney’s Offices and the Attorney General resulted in today’s settlement,” says 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.”

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 require that each party to a confidential conversation must be advised at the outset if a call is being recorded, so that he or she can object or terminate the call if he or she does not wish to be recorded.

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, without admitting liability.

As part of the settlement agreement with Alameda County and the other California 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.


Posted on Mar 29, 2016