SAN DIEGO - Wells Fargo will pay $8.5 million to settle claims by consumer-protection advocates that the bank does not adequately tell customers their calls are being recorded, San Diego County's district attorney said.
Several California counties sued Wells Fargo on behalf of the people last month, claiming the bank failed to "timely and adequately disclose its automatic recording of phone calls" with customers and the public.
California's laws on recording phone calls are much more stringent than other states, requiring that each party in a confidential conversation be advised at the outset if a call is being recorded so they can reject or end the call if they do not want to be recorded.
San Diego District Attorney Bonnie Dumanis said Tuesday the joint effort of her office with consumer-protection units in Los Angeles, Riverside, Ventura and Alameda had resulted in a settlement.
"Preserving an individual's right to privacy is among the greatest challenges we face in the Digital Age. This settlement underscores our office's commitment to protecting San Diego County consumers from intrusions and privacy violations in the marketplace," Dumanis said.
Wells Fargo - without admission of liability - must now comply with California's standards of notifying customers by making clear disclosures to any customer if they are being recorded at the beginning of the conversation.
As part of the settlement, Wells Fargo and its attorneys will implement changes in the bank's nationwide policies and a year-long internal compliance program to ensure the new policies are properly carried out.
A compliance officer must also be designated by the bank to oversee its compliance with California's penal code, according to the settlement.
The bank agreed to pay nearly $7.62 million in civil penalties and will pay $384,000 to prosecutors to cover the cost of their investigations, according to the Dumanis' office.
Wells Fargo also agreed to contribute $500,000 to two statewide organizations dedicated to advancing consumer protection and privacy rights in lieu of tracking down the individuals who may have been recorded without their explicit consent.