Legal implications of using AI in customer call monitoring

Navy Federal Credit Union facing class action lawsuit over use of AI technology to record and analyze phone calls

Navy Federal Credit Union is currently facing a class action lawsuit over its use of artificial intelligence (AI) technology to monitor customer calls (see, Paulino v. Navy Federal Credit Union et al., case number 3:24-cv-03298, in the U.S. District Court for the Northern District of California). The lawsuit alleges that Navy Federal has been allowing Verint, an AI software company, to intercept, analyze, and record all customer calls without proper disclosure to or consent from the customers.

Importance of Legal Issues for Companies Using AI

The legal issues highlighted in this lawsuit are critical for any company using AI to record and analyze phone calls. Call recording for quality assurance and training purposes is a common practice among businesses. However, the integration of AI into this process introduces new complexities that require careful legal consideration. The use of AI to intercept and analyze calls can expose companies to significant legal risks, especially concerning customer privacy and consent.

Widespread Practice and New Legal Challenges

Call recording is widely used by companies to improve customer service and ensure compliance with regulatory standards. Typically, customers are informed that calls may be recorded for quality assurance purposes. This practice generally suggests internal use of the recordings by the company. However, when AI technology, such as Verint’s Real-Time Agent Assist and Speech Analytics, is used, the scope of call monitoring extends beyond traditional recording. The AI not only assists in real-time but also analyzes and potentially uses the data for its own development.


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