Disclosures Likely Necessary When Recording Cell Phone Calls to Consumers in California

Verizon Wireless and its third-party collection agency partner, Collecto, are named in a suit that has far-reaching implications for the collection industry.

At issue is California Penal Code section 632.7:

632.7. (a) Every person who, without the consent of all parties to
a communication, intercepts or receives and intentionally records, or
assists in the interception or reception and intentional recordation
of, a communication transmitted between two cellular radio
telephones, a cellular radio telephone and a landline telephone, two
cordless telephones, a cordless telephone and a landline telephone,
or a cordless telephone and a cellular radio telephone, shall be
punished by a fine not exceeding two thousand five hundred dollars
($2,500), or by imprisonment in a county jail not exceeding one year,
or in the state prison, or by both that fine and imprisonment. If
the person has been convicted previously of a violation of this
section or of Section 631, 632, 632.5, 632.6, or 636, the person
shall be punished by a fine not exceeding ten thousand dollars
($10,000), by imprisonment in a county jail not exceeding one year,
or in the state prison, or by both that fine and imprisonment.
(b) This section shall not apply to any of the following:
(1) Any public utility engaged in the business of providing
communications services and facilities, or to the officers,
employees, or agents thereof, where the acts otherwise prohibited are
for the purpose of construction, maintenance, conduct, or operation
of the services and facilities of the public utility.
(2) The use of any instrument, equipment, facility, or service
furnished and used pursuant to the tariffs of the public utility.
(3) Any telephonic communication system used for communication
exclusively within a state, county, city and county, or city
correctional facility.
(c) As used in this section, each of the following terms have the
following meaning:
(1) “Cellular radio telephone” means a wireless telephone
authorized by the Federal Communications Commission to operate in the
frequency bandwidth reserved for cellular radio telephones.
(2) “Cordless telephone” means a two-way, low power communication
system consisting of two parts, a “base” unit which connects to the
public switched telephone network and a handset or “remote” unit,
that are connected by a radio link and authorized by the Federal
Communications Commission to operate in the frequency bandwidths
reserved for cordless telephones.
(3) “Communication” includes, but is not limited to,
communications transmitted by voice, data, or image, including
facsimile.

For those who skimmed through that, here’s your “too long; didn’t read” version: If you’re recording calls to cell phones in California, you have to let the called party know that you’re recording those calls.

In Lofton v. Verizon Wireless (VAW) LLC, the plaintiff received two phone calls from Collecto. The first problem for Collecto was: John Lofton wasn’t a Verizon customer and wasn’t the owner of that debt.

The other issue for Collecto: they recorded the calls with Lofton without telling him the calls were being recorded.

Lofton alleges this is both an invasion of his privacy and a violation of the aforementioned penal code. Lofton also alleges that Verizon Wireless has a vicarious liability, since Collecto was collection on Verizon’s behalf.

Verizon’s argument: Collecto’s recording of the phone calls actually isn’t a violation since Lofton’s privacy wasn’t breached. This conclusion is seemingly based on the fact that, in the conversations between Collecto and Lofton, no personal information was said aloud and captured on the recording.

The Court, though, didn’t see it that way. It’s not the “invasion of privacy” angle that Verizon should be focusing on; it’s that they allowed their third-party collection agency to record a phone call on a cell phone without notifying the participants that the call was being recorded in the first place.

This underlines the necessity of full honest disclosures when collection agencies interact with consumers. Providing a warning that “this call will be recorded” for all calls to consumers seems to provide the most protection in this particular case.