Yelp Facing Class Action Suit Over Recording Customer Calls without Notification

Yelp, a website that matches customers to local businesses, faces a class action suit in Los Angeles. This case, number BC652472 filed in the Superior Court of California in Los Angeles, has wide implications for customer service practices in nearly all industries that have representatives answering phone calls that are recorded. These phone calls are usually tethered to disclaimers that calls are recorded “for Quality Assurance purposes.” Yelp, apparently, left that part out of its interactions with one caller.

Plaintiff David Schram of Los Angeles, filed a punitive class action suit on March 2, 2017. The suit alleges that Yelp Inc. did not follow California Penal Code 632. Schram, an attorney, stated that Yelp recorded his calls with their financial department without permission, thereby breaking the law. Schram went through an automated system that failed to advise him he was being recorded and neither customer service representative he spoke with told Schram the current conversation was being recorded. Only after these calls took place did a customer service agent inform Schram that all sales and customer service calls were recorded.

California Penal Code 632 states that entities that “intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device, eavesdrops upon or records the confidential communication…shall be punished” by a fine up to $2,500 and up to one year in prison.

In the suit, lead plaintiff Schram states that Yelp had a pattern of recording calls without informing the callers beforehand. The number of class members will depend on other Yelp callers stepping forward to join the allegations in the lawsuit. Schram thought it could be many thousands. The suit calls for punitive and statutory damages. This could be as much as $5,000 for every violation and a fine of $2,500 for every violation. If Yelp is convicted of any of the charges, the fine per violation could go as high as $10,000, according to the Penal Code 632.

Total damages in the case, if successful, would depend on how many prior Yelp callers learn of the lawsuit and become class members.