California Lawmakers Plunge Some Transactions into 3rd World

California has come up with a law that hurts the very people it says it is protecting by making it difficult to record call center transactions. Penal code 632 of California law says in-part:

(a) Every person who, intentionally and without the consent of
all parties to a confidential communication, by means of any
electronic amplifying or recording device, eavesdrops upon or records
the confidential communication, whether the communication is carried
on among the parties in the presence of one another or by means of a
telegraph, telephone, or other device, except a radio, shall be
punished by a fine not exceeding two thousand five hundred dollars
($2,500), or imprisonment in the county jail not exceeding one year,
or in the state prison, or by both that fine and imprisonment. If the
person has previously been convicted of a violation of this section
or Section 631, 632.5, 632.6, 632.7, or 636, the person shall be
punished by a fine not exceeding ten thousand dollars ($10,000), by
imprisonment in the county jail not exceeding one year, or in the
state prison, or by both that fine and imprisonment.

This is part of a more bewildering law Penal Code 630-638 that seems to be designed to make it exceedingly difficult to do business in the state.

The challenge for business owners is they need to record calls for many reasons such as quality control and government compliance. Now, it is potentially illegal to record such calls without the consent of the caller.

Then there is the importance of keeping a record of all calls for the caller’s own protection. A defense from sexual and other forms of harassment for example.

I spoke about this issue with Don Palmer, CEO of SIP PRINT and he told me that the law primarily affects outbound calls and was passed early last year. I asked him about inbound calls and he said you need to have an auto-attendant to tell people all calls will be recorded. The question I posed was what if a caller calls and hears the greeting but doesn’t consent. He said it may be that by continuing the conversation you are consenting but this could be a legal grey area. You may see this as an opportunity to call a lawyer to be sure you are on the right side of this law.

The lawyers love this law… TMC recently reported that Bass Pro Outdoor World has been added to other companies such as Applebee’s and Capitol One which are part of a class-action suit relating to this law which has resulted in a $6 million dollar settlement so far.

Here is the challenge for such laws… You are a collections company making a phone call to collect. You tell the recipient of the call that staying on the line will result in their consent regarding the call being recorded. If the person does not consent, they can hang up. So how exactly does one collect from a person in this situation? Friend them on Facebook? Twitter? Drive to their house?

Then there is compliance – many of these regulations (HIPAA, SOX) require all calls to be recorded. If you are a stockbroker calling a client to discuss their portfolio and they don’t agree to the call being recorded (think Martha Stewart sounding like a lion roaring underwater) there is no way the call can take place. The client would have to drive to the office to make the transaction happen.

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This reminds me – in countries like Iran, stocks are bought and sold not generally electronically but over a cup of tea with the other party. It seems California, the source of much of the world’s advanced technology has plunged some of the state’s business transactions into the third-world.

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