Tuesday September 07 , 2010

Undisclosed Monitoring or Recording of California Consumers Is Illegal

Debt collectors like to secretly record conversations between themselves and consumers.  It is illegal. Debt collectors and many original creditors employ the use of recording devices which monitor and/or record all or part of calls with consumers. Failure to properly disclose the fact that these conversations are being monitored or recorded violate California law and subject the debt collector or creditor to statutory liability in the amount of $5,000 per incident. See Cal. Penal Code §§ 632 and 637.2. The California Appeals Court in Cashcall, Inc. v. Superior Court, 159 Cal.App. 273 (2008) found that the fact the original named Plaintiff’s lacked standing because they were not in-fact illegally monitored by Defendant, Plaintiffs were entitled to conduct pre-certification discovery to identify members of the class who did have standing. The Court reasoned that the undiscovered members of the class, by the very nature of the claims (secret monitoring), would never know their rights were affected if they did not receive notification. This decision, a result of tireless work by Hyde & Swigart, set new precedent in California allowing discovery and contact with potential members of a class despite the fact no named Plaintiff had standing.