Lawyers Investigate Claims of California Invasion of Privacy Act Violation

Lawyers are currently investigating claims of California Invasion of Privacy Act (CIPA) violations by companies. The CIPA prohibits companies from recording phone calls with consumers without notifying the consumer that the call is being monitored.

Nonetheless, many companies monitor calls without telling consumers in advance. If you or a family member believe you have had your phone calls monitored by a company and were not notified at the beginning of a call, you may have a legal claim.

Last week, medical debt collecting company Medicredit Inc. settled a class action lost that claimed that the company violated the California Invasion of Privacy Act by not notifying consumers that their calls with the company were being monitored. As a result of the settlement, Medicredit will pay $5 million to consumers who submit valid claims of having their calls monitored.

The $5 million deal is the result of almost three years of litigation between consumers and he company, which involved “voluminous discovery,” two failed rounds of mediation, and the certification of a class of over 11,000 affected consumers. According to the deal, Medicredit will have to pay cash compensation to consumers and will amend telephone scripts to include a disclosure of call recordings within the first 30 seconds of every call.

The consumers were led by plaintiff Sheena R., who stated that though she believed they could win the case on its merits, taking the settlement deal provided “significant benefits” to consumers. She states that taking the settlement deal is in the consumers’ best interests while eliminating the costs associated with continued litigation. If the deal goes through, Sheena would be paid a service award of $15,000.

The consumers’ motion to approve the settlement deal stated that “the negotiated settlement reflects a comprise between avoiding that risk and the risk that the class might not recover.” The motion goes on to state that the consumers believe the settlement is a “fair and reasonable alternative to continuing to pursue the litigation.”

To Medicredit’s benefit, accepting the settlement also eliminates the risk of continued litigation. Had the Medicredit recorded phone call class action lawsuit gone to trial and Medicredit had lost, the company could have faced steep financial repercussions.

According to the California Invasion of Privacy Act’s guidelines, a company may owe an individual up to $5,000 for each violation of the act. With the Medicredit CIPA violation class action lawsuit’s established class of 11,000 affected consumers, Medicredit would be responsible for paying over three times the amount of actual damages to the consumers.

Under the terms of the settlement, Sheena and Medicredit determined that any settlement funds unclaimed by consumers would be paid to a designated recipient. As of yet, the recipient has not been finalized — Sheena proposed giving the funds to the Public Justice Foundation, while Medicredit proposed to send the funds to the Legal Aid Association of California to advance consumer privacy protections.

The Medicredit Call Recording California Invasion of Privacy Act Violation Class Action Lawsuit is Case No. 2:15-cv-04912, in the U.S. District Court for the Central District of California.

UPDATE: August 2018, the California Medicredit call recording class action settlement is now open. Click here to file a claim.