Wells Fargo Settles $19.5M Class Action Over Secret Call Recordings

Wells Fargo, along with two of its business partners, has agreed to a settlement in a class action lawsuit that alleges the secret recording of sales calls to potential customers over nearly a decade. The total payout is set at $19.5 million, with an additional $200,000 allocated for administrative costs. This settlement comes after a lawsuit filed in October 2023, which accused The Credit Wholesale Company, an independent sales organization, of recording calls made on behalf of Wells Fargo and fintech firm Priority Payment Systems without the knowledge or consent of the call recipients. The calls were intended to set up sales appointments for credit card processing equipment and services.

The lawsuit specifically cited violations of Sections 632 and 632.7 of the California Invasion of Privacy Act (CIPA), which require disclosure of call recordings. The settlement not only includes financial compensation but also mandates that The Credit Wholesale Company reform its practices. The company has agreed to disclose at the outset of any future calls that the conversation is being recorded, ensuring compliance with privacy laws.

The minimum cash payment for each eligible call is estimated to be approximately $86, but this amount could increase to as much as $5,000 per call, depending on the number of claims submitted. Class members, which include both businesses and individuals who received calls from Wells Fargo's service provider between October 22, 2014, and November 17, 2023, must submit their claims by April 11. The court preliminarily approved the settlement on January 24, with the final approval hearing scheduled for May 20.

This settlement highlights the importance of transparency and compliance with privacy laws in business practices. The financial impact on Wells Fargo and its partners serves as a reminder of the potential consequences of non-compliance, while the mandated reforms aim to prevent similar incidents in the future. The settlement process ensures that affected individuals and businesses receive compensation for the alleged violations, while also promoting better practices within the industry.