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Wells Fargo Reaches $8.5 Million Settlement Over Privacy Violations

Mar 30, 2016
The attorneys general representing 44 states announced that they reached a $100 million settlement with Barclays Bank PLC and Barclays Capital Inc.

California Attorney General Kamala D. Harris and five district attorneys have announced a $8.5 million 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.” 

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