Home / Compliance / Collection Agency Agrees to $5 Million Settlement After Being Sued For Not Saying That Calls Were Being Recorded

Collection Agency Agrees to $5 Million Settlement After Being Sued For Not Saying That Calls Were Being Recorded

A medical collection agency based in Nashville has reached a $5 million preliminary settlement in a class-action lawsuit filed against it after the company was accused of recording calls and not notifying individuals on the other end of the phone.

The collection agency was accused of violating the California Invasion of Privacy Act.

A copy of the preliminary settlement in the case of Sheena Raffin v. Medicredit, Inc., and The Outsource Group can be accessed here.

The settlement covers 11,000 individuals which represents individuals who received calls from the defendant between June 2014 and February 2015 while being physically present in California and using a mobile phone with a California phone number who participated for the first time in a call with the defendant.

The California Invasion of Privacy Act has been around since 1967 and prohibits recording calls without the consent of all parties with respect to confidential communications. The law does not state what defines a confidential communication.

Raffin, as the named plaintiff, will receive $15,000 as part of the settlement. The plaintiff’s attorney, Todd Friedman, will receive 33% of the total settlement amount. If all of the remaining 11,000 members of the class opt in to receive their settlement, each would receive about $300.

The defendant was accused of recording calls with individuals and not notifying them at the outset of the conversation. Despite the settlement, the defendants have “vigorously denied and continue to deny” they violated the state law.

The defendant will also add a notation to its training scripts, ensuring that the recording notification is given within 30 seconds of initiating the call.

 

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