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  • Writer's pictureJulie A. Cardosi

Legal Pitfalls of Recording Vehicle Purchase or Lease Transactions

Dealerships have been considering the use of video and audio recording of vehicle purchase or lease transactions to enhance customer service and security, as well as to mitigate potential disputes. Before implementing any such recording practices, it is essential to understand the legal complexities under state and federal law underlying this issue. As a general rule under Illinois or federal law, it is unlawful to record a telephone call or private conversation in which you are not a party and do not have a party’s consent. Additionally, the federal wiretap law prohibits placing a recording device on a person or telephone, in an office or elsewhere to secretly record a conversation between two persons who have not consented.

Illinois has some of the strictest laws in the country pertaining to audio and video recording. Under the Illinois eavesdropping law, contained within the Illinois Criminal Code (720 ILCS 5/14-1 et seq.), there are specific provisions and requirements relating to recording conversations. A significant provision under Illinois’ eavesdropping statute is the two-party consent requirement. That is, all parties to the recorded conversation or transaction must know about and permit the recording party to record, and consent to being recorded.

In a vehicle transaction this would typically include the customer and dealership personnel. Thus, if a party is not notified of, or consented to, the recording, a violation of this statute has occurred. The form of notification should be clear and conspicuous whether through signage, written disclosures, or recorded message on a telephone call. And as with any form of written consent, it should be expressly granted, informed, and clear and conspicuous. A violation of this law is a felony. Injured parties are also entitled to civil remedies including injunctive relief and actual and punitive damages.

In addition to requirement of obtaining the customer’s informed consent prior to recording, questions also arise concerning whether dealership employees can be recorded by the dealership, including as part of a customer transaction, without the employee’s individual prior consent, and whether the employee can be required to consent as a condition of employment. These are important legal considerations that each dealership should discuss with their private attorney as a number of issues, including privacy, labor, and dealership agency must be evaluated.

The contents of any recording must be protected from inadvertent disclosure or even hacking and should not be retained longer than necessary. In a vehicle transaction, a recording might contain “non-public personal information” as defined under privacy laws such as the federal Gramm Leach Bliley Act. If so, dealerships are required under the FTC Safeguards Rule to safeguard the recording, and other federal privacy laws would require the dealership to make required disclosures to the customer.

Additionally, video recording without audio may also have legal implications. There has been a spike in claims under the federal Video Privacy Protection Act (VPPA) (18 U.S.C. 2710), a statute enacted several years ago to address the privacy of consumers in video rental and sales transactions. The VPPA has been effectively repurposed to enforce privacy and prohibit the disclosure of “personally identifiable information” from video records without the customer’s informed, prior written consent.

Moreover, there has also been an increase of litigation against businesses in Illinois under the Biometric Information Privacy Act (BIPA) (740 ILCS 14/1 et seq.). This Illinois law addresses the collection by a private entity of “biometric identifiers” and “biometric information” from any person which includes both dealership customers and employees. “Biometric information” includes any information based on a person’s biometric identifier used to identify that person, regardless of how it’s collected. And a “biometric identifier” includes a person’s retina or iris scan, fingerprint, voiceprint, and scans of hand or face geometry.

BIPA prohibits an entity from collecting or obtaining a person’s biometric identifier or biometric information unless the entity: (a) informs the person in writing (i) that a biometric identifier/information is being collected or stored, and (ii) of the purpose and term length for which the biometric identifier/information is being used, collected, or stored; and (b) receives a written release from the person of that person’s biometric identifier or biometric information. Any business that collects biometric information or biometric identifiers must formulate written policies that set forth a retention schedule, as well as guidelines for the permanent destruction of records of biometric identifiers after the initial purpose for collecting the information has been satisfied or 3 years after collection, whichever is earlier.

Illinois dealerships considering recording vehicle transactions must navigate the complex legal landscape with their counsel to ensure compliance with both state and federal laws, including the potential privacy concerns which come into play when capturing and handling customer information and data. This includes establishment and implementation of clear policies and compliant disclosures, consent, collection, and record maintenance practices to avoid legal pitfalls.

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