District Court approves $50 million class action settlement over recorded calls

Courts Settlement Class Action State Issues California Consumer Finance

On Auguts 4, the U.S. District Court for the Northern District of Illinois approved a class action settlement, resolving allegations that a call center hired by a national bank and its merchant processing servicer (collectively, “defendants”) violated the California Invasion of Privacy Act (CIPA) by recording calls without receiving customers’ permission. According to the plaintiff’s motion for preliminary approval, a lawsuit was filed in 2016 on behalf of a proposed class of small businesses in California who received calls from call center companies attempting to sell credit and debit card payment processing services, alleging, among other things, that the defendants were in a principal-agent relationship with the companies that violated the CIPA by recording telemarketing calls without any warning that the recording was occurring. As previously covered by InfoBytes, class members, comprising California businesses who did not sign a contract for merchant processing services with the servicer, filed suit against another national bank in 2016 claiming the call center placed sales appointment calls to the businesses without disclosing that the calls were being recorded. The preliminarily approved settlement in that case required the defendants to pay $28 million, of which up to $5,000 was paid for each eligible call that a class member received during the class period, which was estimated to be 192,836 individuals. The recent preliminarily approved settlement will require the defendants to pay $50 million, of which up to $5,000 will be paid for each eligible call that a class member received during the class period.