SAN FRANCISCO (CBS SF) — California Attorney General Kamala Harris and five district attorneys, including Alameda County District Attorney Nancy O’Malley, announced Tuesday an $8.5 million settlement of a telephone privacy lawsuit against Wells Fargo Bank.

The lawsuit, filed on behalf of the people of California by Harris and the five county prosecutors in Los Angeles County Superior Court last
month, alleged the bank failed to tell customers in a timely and adequate way that it was recording their private conversations with staff members.

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California law requires that all parties to a confidential conversation must agree before it can be recorded. Harris said all participants must be notified of recording at the start of a call, so that they can object or end the call if they wish to do so.

San Francisco-based Wells Fargo does not admit any wrongdoing in the settlement, signed by Superior Court Judge Stephanie Bowick on Monday.

In the settlement, the company agrees to pay civil fines of $7,616,000 and prosecutors’ investigation costs of $384,000, and to donate
$500,000 to two nonprofit groups that promote consumer protections and privacy rights.

Wells Fargo agreed to make a “clear, conspicuous and accurate disclosure to any consumer of the fact of recording” at the beginning of a
phone conversation.

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The bank will also conduct periodic internal testing of its staff to make sure the agreement is being followed.

The civil fines and investigative cost payments will be divided equally among the offices of Harris and the five district attorneys.

Each agency, including the Alameda County District Attorney’s Office, will receive $1,269,333 in civil penalty funds and $64,000 in
compensation for investigative costs. The four other district attorneys are from Los Angeles, Riverside, San Diego and Ventura counties.

O’Malley said in a statement, “As information technology reaches ever further into the lives of our citizens, strict compliance with California’s privacy laws becomes ever more imperative to protect the rights of those individuals.” Wells Fargo spokesman Tom Goyda stated, “Customer service is at the heart of everything we do and Wells Fargo informs customers that calls
are being recorded.

“We have resolved the…concerns regarding issues related to the timing of recording disclosures under state law and have put procedures in
place to ensure that disclosures occur at the beginning of the call,” Goyda said.

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Harris said that after being informed of the alleged deficiencies in disclosures, the bank’s staff and lawyers worked cooperatively to
implement changes in the bank’s policies nationwide.