Cabela Wholesale Call Recording Class Action Settled
There are many regulations in place that organizations in different industries have to abide by. The laws are always changing and being amended to ensure new technologies and systems that are introduced in the marketplace are properly regulated. This requires the organizations that are affected by these rules to always be aware in order to avoid the very costly fines regulators impose, along with possible lawsuits from consumers. In the case of Cabela Wholesale, the company was sued because it didn't properly notify callers that their conversations were being recorded when consumers called its toll-free customer service lines.
The result of this infraction was a $3,850,000 class action settlement by Cabela. The company denied the claims, but it settled to avoid the cost and uncertainty of continued litigation and trial.
The case was brought by plaintiffs Michael Saunders, Gary Wasson, Joseph Nicols, and Ralph Schub. They claimed Cabela customer service representatives failed to disclose that their conversations were being recorded at the onset of the calls at the toll-free line from locations in California.
The California Invasion of Privacy Act (CIPA), Penal Code section 632, requires consent of the called party before any recording can be initiated. The code also makes reasonable expectations of consumers that their calls will not be monitored. Since Cabela didn't warn their callers the conversations would be recorded, according to the plaintiffs, the suit was filed.
This case and other like it highlight the lack of awareness organizations have when it comes to the rules and regulations that each state has in place to protect consumers. For companies with a national or international presence, it is extremely important to ensure systems are in place to follow the regulatory compliances the organization has to follow.
With today's technology, it is almost impossible to violate these regulations if the right system is put in place. Automated systems ensure the right message is announced before and after a call so consumers are always notified if and when a recording is taking place.
The discovery process of the Cabela suit revealed around 150,000 telephone calls were made from 88,000 unique telephone numbers with a California area code from Dec. 12, 2012 through Feb. 18, 2014. The right call recording and monitoring technology could have recognized the problem right away, and avoided more than 14 months of the CIPA Penal Code section 632 violation that was taking place in the company.
Edited by Alicia Young