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Under sections 632 and 637.2 of California’s Invasion of Privacy Act (CIPA), call recording and monitoring without the consent of the other person could cost businesses a $5,000 penalty. However, in a January 17 ruling, California’s 9th Circuit Court of Appeals stated that the content of the call was the primary factor in deciding whether the call should be considered private.

In Faulkner vs. ADT Security Services, Inc., a customer stated that he had telephoned ADT to dispute a billing charge. He then argued that ADT could not record the call under CIPA. The court, however, stated that since the customer shared no information that could be labeled “confidential,” such as a Social Security number or an unlisted phone number, the customer had no reasonable expectation of privacy.

In a recent Lexology article, the Association of Corporate Counsel points out that companies that ask for sensitive information before giving notice that the call could be monitored or recorded risk incurring a CIPA penalty. If companies have a standard practice of recording and monitoring calls, then they need to take some precautions before calling California or other dual-consent states.

First, before answering an inbound call, a recording or an agent should give the customer notice that the call may be recorded or monitored. Second, when making outbound calls, agents should warn the recipient that the call could be recorded. If necessary, call center managers should provide agents with scripts to get them in the habit of advising customers about call recording.

The association also recommends that companies write provisions into customer contracts letting customers know about their call recording practices. If call center operations are outsourced, then the contract should require vendors to inform customers about the recording of both inbound and outbound calls.

Finally, any company that makes recorded calls to California should purchase insurance to help them defend against third-party claims related to CIPA. By taking all of these precautions, companies that record both inbound and outbound calls dealing with California residents can both respect customer privacy and avoid the CIPA trap.

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