in Newswire Published on October 4, 2022

Charles Schwab Accused of Examining Voiceprints Without Consent

Laughead v. The Charles Schwab Corporation

Filed: October 3, 2022 ◆§ 3:22-cv-01498-AJB-JLB

A class action alleges the Charles Schwab Corporation has unlawfully recorded and examined consumers' voiceprints without express written consent.

Defendant(s)

The Charles Schwab Corporation

Law(s)

California Invasion of Privacy Act

State(s)

California

A proposed class action alleges the Charles Schwab Corporation has unlawfully recorded and examined consumers' voiceprints for identity verification purposes without express written consent.

According to the 12-page case, the financial services company has run afoul the California Invasion of Privacy Act (CIPA) by analyzing without permission callers’ voices as a means to "authenticate or refute the true identity of callers" and to "determine the truth or falsity of the callers' statements."

The complaint relays that consumers have the option to enroll in a system called Schwab voice ID Service, which the company defines as "a new voice ID service that uses voice biometrics technology to identify you by your unique voice." However, the case alleges Charles Schwab performs similar voice examinations on callers regardless of whether a person has enrolled in the service.

The plaintiff, a California resident, alleges that the company has been secretly using this technology "for years prior to publishing its existence and seeking enrollment."

Using voice recognition software, the Charles Schwab Corporation can gather a unique "voice print" of each caller, the case alleges.

"Creating a voice print requires extracting an individual's phonetic features (including their unique speech patterns, tones, and other characteristics) from their voice. As such, a voice print serves as an audible 'fingerprint' which can directly identify an individual and can even reveal the speaker's behavioral traits.

With a database of caller voice prints at its disposal, Charles Schwab can authenticate a caller’s identity and analyze "audible indications of lying" to determine if the individual is being honest. The plaintiff charges that callers not enrolled in the Schwab voice ID Service are unaware that their statements are being scrutinized.

Per the lawsuit, examining consumers' voices without obtaining consent violates the CIPA, which states that a company must receive express written permission before using a system that "examines or records in any manner voice prints or other voice stress patterns of another person to determine the truth or falsity of statements made by such person."

The case closely compares this system to a polygraph test, which under California law can only be administered with a subject’s express written consent.

The lawsuit looks to represent all California residents who had their voiceprints or other voice stress patterns examined or recorded by the Charles Schwab Corporation to determine the truth or falsity of their statements.

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