Bank records customer call without consent; refuses to erase tape

PIPEDA Case Summary #2003-176

[Principles 4.1.4, 4.3 and 4.3.5, Schedule 1]

Complaint

A customer complained that his bank had

1. collected his personal information, in the form of a tape-recording, without his consent; and
2. unreasonably refused to destroy the recording after he had expressly refused consent to the collection.

Summary of Investigation

The complainant called his bank to activate his new credit card. When informed that the call was being tape-recorded, he objected and asked that the taping cease. Both the telephone agent and a supervisor told him that the taping could not be stopped. Neither told him of any other way of activating his card without the tape-recording of a conversation. The complainant asked that the recording be erased, but the activation centre staff were unable to address his concern.

The bank later wrote to advise him that the taping of calls to the activation centre was its record-keeping process to confirm card activation, that the tape in question could not be erased because it was a transaction record-keeping entry, and that the procedure was equivalent to a signature. In a subsequent letter, the bank told him that it could not erase the tape because it was not possible to isolate one telephone conversation for deletion among the numerous calls on each recording. The complainant was also told that erasure was not possible because the tape was "too compressed".

The bank's position was that it had the complainant's consent to taping calls by virtue of notifications of the practice in documentation pertaining to his various accounts. Specifically, the bank suggested that he would have received such notification in a booklet of terms and conditions pertaining to his credit card account in 2001. The complainant did not recall ever having received any such documentation or notification. The documentation accompanying his new credit card gave instructions on activation by telephone, but did not indicate that calls would be taped or that a card could be activated by any other means.

In a previous case, the bank had given the Commissioner's Office assurance that it was implementing a modified policy on the recording of customer calls to conform with "best practices" recommended by the Commissioner. These practices included informing a customer of call taping and its purposes at the beginning of each call and offering alternatives to call taping upon objection. To explain its failure to have offered the complainant any alternatives, the bank cited employee error, attributable to the employee's lack of experience with a new procedure implemented only a week before the complainant's card activation call. The bank assured the Office that an alternative automated activation method was available to customers who objected to call taping and that telephone agents had been made aware of the modified policy and the new obligation to offer this alternative to objectors.

The complainant reported two further telephone conversations with bank representatives, two months and eight months after the purported implementation of the modified policy. Transcripts confirmed the following:

• Both calls were taped from the outset, but the complainant was not notified of the taping until he asked.
• The complainant objected to the taping, but was offered no alternatives.
• Bank representatives gave inconsistent explanations of the purposes of call taping.
• One telephone agent said he had never been made aware of any obligation to notify callers of the practice.

Ten months after the purported implementation, the Office called the card activation centre and observed as follows:

• The telephone agent did not acknowledge that the call was being taped, identify the purpose of taping, or speak of alternatives, until he was specifically asked.
• When asked about alternatives, he initially replied that the caller could go to a branch and activate a card in person.
• When asked pointedly about automated activation, he replied that no automated system existed; upon further consideration, he said that such a system did exist, but was available only after midnight.
• A supervisor stated that the agent had been mistaken, that an automated system did exist, and that it was immediately available 24 hours a day to any customer who requested it.
• The supervisor himself did not acknowledge the taping of the conversation until he was asked. He indicated that, though calls were always taped from the point of telephone connection, the usual practice was to wait until the point of card activation before giving notice of the taping.

The complainant asked the bank for a transcript of the recording of his card activation call. The bank replied that it could not locate the recording because he had failed to provide specific information "such as approximated time and/or agent name". In an e-mail to the bank, the complainant expressed his puzzlement that a company whose stated purpose for taping card activation was to have a record of the transaction would not be able to find the record easily when needed. He found it odd that the bank did not have some method of cataloguing calls for ready access in future.

Commissioner's Findings

Issued June 3, 2003

Jurisdiction: As of January 1, 2001, the Act applies to any federal work, undertaking, or business. The Commissioner had jurisdiction because the bank in question is a federal work, undertaking, or business as defined in the Act.

Application: Principle 4.1.4 states in part that organizations must implement policies and practices to give effect to the Act's principles, including training staff and communicating to staff information about the organization's policies and practices. Principle 4.3 states that the knowledge and consent of the individual are required for the collection, use, or disclosure of personal information, except where inappropriate. Principle 4.3.5 states that, in obtaining consent, the reasonable expectations of the individual are also relevant.

Against the plain fact that the complainant had expressly refused consent to the taping on the actual occasion of the call, the Commissioner considered the bank's contention that it had nevertheless had his consent by virtue of notifications contained in pertinent documentation. The Commissioner deliberated as follows:

• Regarding written notifications, it was not at all reasonable that the bank had not brought the practice of call taping to the complainant's attention in the one place where he would have been most likely to notice - in the instructions on activating a new credit card. That was where he would most reasonably expect to be notified in writing both that a card activation call would be taped and that an alternative automated system was available to any objector.
• In previous deliberations on matters of consent, the Commissioner had recognized and established, as a reasonable expectation of the individual, the principle that, notwithstanding written notifications elsewhere, the fact and purposes of a collection of personal information should be brought to the individual's attention at the time of the collection. In support of this principle, he had developed "best practices" specific to the recording of customer telephone calls, and the bank had previously given an assurance that it accepted the principle and best practices and was implementing a modified policy accordingly. The complainant's experience, however, seemed to indicate that the bank had not fully appreciated the implications of what it was implementing.
• Although the bank had indeed informed the complainant, in accordance with recommended best practices, that his call was being taped for certain purposes, it seemed not to have understood that the occasion of stating purposes is an occasion of consultation about consent. The purpose of stating a purpose is to present to the individual a proposition for consideration whether to accept or reject.
• Rejection of the proposition is an option that any consent mechanism must reasonably accommodate. Having thus been consulted about the proposition that his call would be tape-recorded, and having expressly rejected the proposition, the complainant had had good reason to expect that due allowances would be made to him in respect of his expressed preference.
• In the Commissioner's view, the complainant had had every reason to expect

1. that the bank would stop taping his conversation at his request once he had been consulted and expressly refused consent;
2. that he would be informed of any consequences of his refusal of consent and of any alternative means available for achieving his purpose;
3. as he had himself had so well expressed in his e-mail to the bank, that a taped conversation collected for the stated purpose of marking a record of a certain transaction would be kept in such a manner that it would be easily retrievable by the record-keeper and easily accessible at the individual's request; and
4. that the bank would honour his request for the deletion of personal information that it had persisted in collecting despite his expressed refusal of consent.

• The bank had failed to meet any of these reasonable expectations.

In sum, the Commissioner determined that the bank had not had the complainant's consent to the tape-recording of his card activation call and had failed to respond in a reasonable manner to his refusal of consent. The Commissioner found therefore that the bank was in contravention of Principles 4.3 and 4.3.5.

He also deemed it abundantly evident that the bank had failed to communicate to its staff, through training or other means, the information necessary for the effective and consistent implementation of his recommended best practices regarding the tape recording of customer telephone calls. He found therefore that the bank was also in contravention of Principle 4.1.4.

He concluded that the complaint was well-founded.

Further Considerations

With regard to the complaint proper, the Commissioner made the following recommendations:

1. The bank should make further efforts to find the tape-recording of the complainant's card activation call, with a view to (a) providing him with a transcript of the conversation in fulfilment of his request and in keeping with its obligations under Principle 4.9 of Schedule 1 to the Act and (b) thereafter complying with his request that the taped conversation be erased from its records.
2. The bank should also erase from its records the other tape-recordings that it had collected without his consent and to which he had specifically objected.
3. The bank should alter its call recording system to the effect that (a) telephone agents will have control over the taping so that they may initiate it on indication of the customer's consent and end it at the customer's request and (b) recorded calls will be stored and catalogued in such a way that they may be easily and individually retrievable and, where circumstances warrant, eraseable.
4. The bank should include, in the activation instructions accompanying any new credit card, clear notifications to the effect that (a) telephone conversations with activation centre agents will be tape-recorded and (b) an alternative automated activation system is available.
5. If the bank intends to continue recording calls to its card activation centre from the point of telephone connection, it should ensure that its agents notify the caller immediately at the outset that the call is being recorded. Alternatively, the bank should consider not initiating the recording of any call until after the notification is given.
6. The bank should also ensure that its agents notify objectors of alternatives to the taping of card activation calls - notably, the automated activation system. Ideally, the agent should begin by notifying the caller of card activation options and should commence the recording of the call only if the caller indicates a clear preference for proceeding through conversation with the agent.

The Commissioner expressed his disappointment at the substantial evidence that, despite his findings and recommendations in a previous case, the bank was continuing as a matter of course to tape customer calls without informing callers of the fact at the outset, without specifying purposes in a clear and consistent manner, and without offering alternatives. He noted that the bank's initial explanation that this was merely a training issue - that it was simply a matter of employees not yet being familiar with new policy and procedures - was no longer credible or acceptable a year after the fact. He therefore made the following additional recommendations:

7. The bank should review, consolidate, and revise its policy and procedures regarding the tape-recording of customer calls in accordance with his findings and recommendations in this and the prior case.
8. The bank should conduct a formal training program to ensure that all its telephone agents are knowledgeable and proficient in the consistent application of policy and procedures regarding the tape-recording of customer calls.