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BANK TO TELL CONSUMERS WHEN THEIR PHONE CALLS ARE BEING RECORDED

 BANK TO TELL CONSUMERS WHEN THEIR PHONE CALLS ARE BEING RECORDED
 HARRISBURG, Pa., Dec. 9 /PRNewswire/ -- CoreStates Bank N.A./Hamilton Bank will make sure consumers are told when their phone calls to the bank are being recorded under terms of an agreement announced today by Attorney General Ernie Preate Jr.
 The agreement deals with CoreStates/Hamilton's practice of recording incoming phone calls from customers on advertised phone lines in the bank's financial services divisions.
 "Other than an intermittent beeping on the recorded telephone lines, first-time callers or customers who have not established a brokerage account with the bank were not given notice that their calls were being recorded, nor were they asked for permission to record their conversations," Preate said.
 The attorney general pointed out that the Pennsylvania Wiretap Act prohibits the recording of a telephone call unless both the caller and the called party consent to having the call recorded.
 The bank contends that the beeping provided notice to callers that their conversations were being recorded and, in effect, established that the caller consented to the recording, according to the agreement.
 Callers who subsequently signed brokerage agreements with the bank were asked to give explicit consent to the recordation.
 But Preate disagreed that these steps were sufficient, alleging that recording the calls without giving all callers "explicit notice" that the call is being recorded is a violation of the Wiretap Act.
 "Callers may not realize that an intermittent beeping on the line indicates that the call is being recorded," Preate said.
 "Even if a caller does understand what a beeping on the line is supposed to mean, a person is likely to hear the beep and realize what it means well into the conversation, which means that at least some of their call would be recorded without notice or consent.
 "It's my position that all businesses operating in Pennsylvania that record calls must expressly tell the caller that the call is being recorded or get prior consent in order to comply with Pennsylvania law."
 Although not admitting wrongdoing, CoreStates/Hamilton has agreed to:
 -- Use prerecorded messages on any recorded "800" number or advertised telephone number lines informing callers that they've reached a telephone line that is being recorded.
 -- Instruct employees who take calls on recorded direct access lines to inform callers that their calls are being recorded.
 -- Continue its present practice of providing an intermittent beep on all recorded lines.
 -- Continue its present practice of advertising and making available at least one line on which incoming calls are not recorded.
 -- Continue its present practice of including in its brokerage account applications a clause obtaining the consumer's consent to having his or her calls recorded.
 CoreStates/Hamilton Bank also agreed to pay $5,000 in costs to the state.
 Preate thanked bank officials for their cooperation and assistance in the investigation.
 "I understand that financial institutions and brokers who deal with sensitive or complex financial transactions may have legitimate reasons for recording calls," he said. "But I want to make certain that the callers know their conversations are being recorded and consent to the recordation."
 The agreement was negotiated by Deputy Attorney General Daniel Clearfield, chief of Preate's Public Protection Division, and Anthony Sarcione, chief of the attorney general's Criminal Law Division.
 CoreStates Bank N.A. and Hamilton Bank are affiliated banks with offices in Pennsylvania.
 -0- 12/9/91
 /CONTACT: Jack J. Lewis of Pennsylvania Attorney General's Office, 717-787-5211, or home at 717-657-9840/ CO: CoreStates Bank N.A.; Hamilton Bank; Attorney General Ernie
 Preate Jr. ST: Pennsylvania IN: FIN SU:


DM -- PG001 -- 0395 12/09/91 09:01 EST
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Publication:PR Newswire
Date:Dec 9, 1991
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