Bank failed to inform customer of taped telephone call

PIPEDA Case Summary #2002-86

[Principles 4.3 and 4.3.5, Schedule 1]

Complaint

An individual complained that a bank failed to inform at the start of a telephone conversation regarding a loan application that it would be taping the call.

Summary of Investigation

In the fall of 2001, the complainant called the bank's 1-800 number to provide information in support of his child's application for a loan. The complainant alleged that the bank only informed him at the end of the conversation that the call had been taped. The complainant had no dispute with the collection of his personal information in support of the loan application; rather, he objected to the manner in which it was collected.

The bank confirmed that it had taped the call and that it had not notified the complainant at the start of the conversation of its intentions. The bank maintained that it did not have to inform the customer based on its understanding that, legally, only one party had to consent to calls being recorded. The bank therefore required its customer service agents to sign documentation acknowledging their consent to the taping of these calls.

The bank argued that taping calls is necessary to ensure that the customer has consented to the application and the terms and conditions of the product or service. It maintained that this practice is the equivalent of having a customer sign an application form and is required for record-keeping purposes.

Commissioner's Findings

Issued October 22, 2002

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

Application: Principle 4.3, Schedule 1, 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.

The Commissioner found that while it would be reasonable for the complainant to expect that there would be some record of the information he provided, it would also be reasonable of the customer to expect to be informed that not just the requested information, but rather the entire conversation, was to be recorded. He also considered it entirely reasonable for the complainant to expect to be consulted in such a matter.

In making his determination, the Commissioner made special reference to his Office's published guidelines, "Guidelines for Recording Customer Telephone Calls," which his Office provided to the bank during the course of the investigation. The guidelines outline his view that taping involves collecting personal information and should therefore meet fair information principles. Conversations should not be taped unless it is for purposes that a reasonable person would consider appropriate in the circumstances. He noted that tape recording captures more than just the specifics required for a loan application. It records other comments that may be of a personal nature but are not relevant to the material required.

As the bank had not made the complainant aware of what it was doing and did not give him the opportunity to consent or to choose alternative means of providing the information, the Commissioner therefore found that the bank had contravened Principle 4.3.

He concluded that the complaint was well-founded.

Further considerations

The Commissioner was pleased to report that, during the course of the investigation, the bank informed the Office that it had revised its policy of taping telephone conversations. The bank indicated that, under its new policy, it informs customers at the start of the conversation of its intentions and provides them with alternative means of communicating their information should they choose not to proceed with the call.