AB 925 Lets Debt Collectors, Subprime Lenders, Others Secretly Record Phone Calls

SACRAMENTO, Calif., April 30, 2015 /PRNewswire-USNewswire/ -- A coalition of California consumer, privacy, senior, student, labor and immigrant advocates urge the defeat of Assembly Bill 925 (Evan Low, D-Campbell), which would eliminate a longstanding prohibition against secret recordings of consumer cell phone calls by subprime lenders, debt collectors, student loan companies, hotels, health care providers, retailers and other businesses. Key backers of AB 925 include AT&T, Verizon and high-tech corporate lobbyists.

The Assembly Committee on Public Safety will hear the bill on Tuesday May 5.

Assemblyman Low's AB 925 would eviscerate a criminal law that for 22 years has required notice and consent by both parties to the recording of cell phone or cordless phone conversations. Virtually all businesses that record cell phone calls provide this notice with a simple pre-recorded statement that the call "may be recorded" at the beginning of a consumer phone call. A consumer who has been informed may terminate the call, or consent by continuing the call. California and ten other states have "two-party consent" laws.

"A secret recording is an ace up the sleeve of a corporation that it plays only when it is to its advantage. But if the clandestine recording proves a customer has a valid complaint about a bill, faulty product, or inferior service, the business destroys or conceals the recording.  AB 925 tilts the playing field. It's not fair to consumers," stated Richard Holober, Executive Director of the Consumer Federation of California (CFC). Link to CFC's analysis of AB 925.

In upholding California's prohibition on secret recording of cell phone calls, the state Supreme Court opined  "companies may utilize such undisclosed recording to further their economic interests – perhaps in selectively disclosing recordings when disclosure serves the company's interest, but not volunteering the recordings' existence (or quickly destroying them) when they would be detrimental to the company." Kearney v. Salomon Smith Barney (2006).

AB 925 opponents include Consumer Federation of California, Privacy Rights Clearinghouse, Consumers Union, Consumer Watchdog, Electronic Frontier Foundation, Older Women's League, Senior Financial Protection Network, California Alliance for Retired Americans, California Nurses Association, California Federation of Teachers, and 12 other groups. Link to No on AB 925 group letter.

SOURCE Consumer Federation of California