Class action claims Navy Federal allows AI co. to monitor, record calls (2024)

Navy Federal calls class action overview:

• Who: A California-based customer of Navy Federal Credit Union is suing the financial institution.
• Why: Plaintiff Avner Paulino claims the credit union used artificial intelligence to covertly listen in on his conversations with Navy Federal’s customer service representatives.
• Where: The Navy Federal class action lawsuit was filed in a California federal court.

A new class action lawsuit claims that Navy Federal Credit Union allows artificial intelligence bots to “secretly” listen to customers’ conversations with its service representatives.

Plaintiff Avner Paulino — a member of the credit union — filed the lawsuit against Navy Federal Credit Union and the AI company Verint on May 31 in a California federal court.

Paulino says Navy Federal has a contract with Verint, a company that designs artificial intelligence bots, to provide software to help its customer service representatives. But he says customers aren’t told that their conversations are being monitored and analyzed by bots, even as they share private information like social security numbers .

“Customers calling Navy Federal expect that their conversations will be kept confidential, the Navy Federal calls lawsuit says. “But in fact, the conversations are intercepted, recorded, and used by Verint.”

AI monitors customer emotions, lawsuit says

Paulino says he has called Navy Federal’s customer service line multiple times.

In those calls, he says he disclosed sensitive personal and financial information like bank account details and social security number, expecting that his conversations with the credit union would be kept confidential.

However, Paulino says Navy Federal was using Verint “Real-Time Agent Assist” software to listen to his conversations with contact-center agents in real-time, and uses AI to notify and assist employees and supervisors about ways to handle telephone calls.

“He did not know that Verint was secretly listening to his conversation, and did not consent to his conversations being recorded and used by Verint,” the Navy Federal class action says. “He would not have called Navy Federal if he had known.”

Real-Time Agent Assist is powered by Verint Da Vinci, which transcribes conversations as they happen. It also captures the tone, pitch and pace to determine a customer’s emotions, the lawsuit says.

It then suggests actions that call center agents can take based on how it thinks customers are feeling.

Verint uses conversations to benefit its own bottom line, lawsuit says

Not only was the artificial intelligence used on his conversation without his consent, Paulino also says Verint used the conversation for its own purposes.

Paulino alleges Verint uses the conversations to enhance and develop its own products, and train its own AI models.

It then sells more products that monitor and analyze communications between companies and their customers, he says.

As a result, Paulino is looking to represent all California residents who called or were called by a company that uses Verint’s Real-Time Agent Assist or Speech Analytics, and who did not consent to the company intercepting the call. He’s also looking to represent a class of California residents who spoke with Navy Federal Credit Union while it used Verint’s Real-Time Agent Assist or Speech Analytics.

Paulino is suing for violations of California privacy laws and is seeking certification of the class action, damages, fees, costs and a jury trial.

Navy Federal is also facing another class action lawsuit in Virginia from customers who claim the credit union denies mortgage applications to minority applicants that would have been approved for similarly situated white Americans.

The plaintiff is represented by Stephen Andrews and Christian Cho of Dovel & Luner LLP.

The Navy Federal Class Action Lawsuit is Avner Paulino v. Navy Federal Credit Union et al., Case No. 3:24-cv-03298, in the U.S. District Court for the Northern District of California.

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