Limiting Your Rights to Privacy in Collections

by Michael Doukas

California takes the strong position that recording a telephone conversation requires the consent of both parties to the conversation in order to protect the privacy of Californians. See California Penal Code §§630-637.9. In fact, California has taken the extraordinary step of including a private right of action in the Penal Code to give consumers recourse in civil court if their privacy has been compromised through the illegal recording of their telephone conversations.

Discover Bank’s Discover Card contains in its adhesive contract for its credit card, the right to record telephone calls is buried therein:

Our Communications with You. You agree that our personnel may listen to or record telephone calls between you and our representatives without additional notice to you, including but not limited to calls we make to collect debts. We may use any medium permitted by law, including but not limited to mail, live telephone calls, automated telephone equipment,prerecorded telephone calls, e-mail and calls to your cell phone to contact

you about your Account or to offer you products or services that may be of value to you. If you prefer not to be contacted in one or more of these ways, you must either telephone us at 1-800-DISCOVER (1-800-347-2683) or write to us at Discover, PO Box 30961, Salt Lake City, UT 30961-0961.

The desired consequence of this provision is to limit any reasonable expectation of privacy a Californian might have in dealing with Discover representatives on the telephone, and that includes with their collection agents or any outside debt collector they may hire. While the provision allows a customer to “opt out,” doing so means losing the opportunity to address matters over the telephone with customer service as most consumers do.

In regard to California, the provision’s intent is to circumvent substantial privacy protections afforded California consumers in California Penal Code §§630-637.9.

When the caller is outside of California, but the consumer is in California, the aforementioned statute still applies. Kelly Kearney, et al v. Salomon Smith Barney, Inc., 39 Cal.4th 95, 137 P.3d 914 (Cal. July 2006). The California Supreme Court made it clear that California’s right to protect its consumer’s privacy is superior to the rights of other states to impose lesser restrictions.

What Discover Bank has sought to do in its adhesive contract is to secure apriori consent to record any and all conversations and eliminate any reasonable expectation of privacy Californians might have.

However, the Kelly Kearney court implies in dicta that consent must be given to each recording of a telephone conversation and offers an example of how that would be done – the familiar notice at the beginning of a conversation that, “this call is being recorded.” In Yoon v. Discover, CV08-04886 MMM (MANx), a trial court case from the U.S. District Court, Central District of California, the plaintiff argued just that position. If plaintiff’s argument were successful, it would make Discover’s apriori contract provision moot. However, the federal trial court in Yoon took the questionable position of interpreting the intent and meaning of the California Statute on its own, rather than deferring to the California Supreme Court’s dicta. The Yoon court thought the dicta in Kelly Kearney were at odds with the meaning of the statute and was, therefore, unpersuaded, choosing to substitute its own interpretation, namely, that the Discover contract provision was consent for any and all conversations to be recorded.

Bottom line: Watch out! Read those boilerplate credit contracts carefully or relinquish privacy rights.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Doukas, Michael Ernest Doukas, Attorney and Counselor | Attorney Advertising

Written by:

Michael Doukas

Michael Ernest Doukas, Attorney and Counselor on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.