The outdoor clothing and gear company Patagonia faces a class action lawsuit over allegations of privacy violations involving its customer service operations. Michelle Gills filed the lawsuit, accusing Patagonia of unlawfully intercepting, recording, and analyzing customer communications through the use of AI-powered software provided by Talkdesk.
According to the complaint, Talkdesk offers communication-monitoring products that enable companies to listen to, record, and analyze phone calls and other communications in real-time. Patagonia allegedly employs these products in customer service interactions without informing customers or obtaining their consent, which the plaintiff claims violates California privacy laws.
The lawsuit outlines the capabilities of Talkdesk’s software, which records conversations and uses artificial intelligence to transcribe and analyze the content of these communications. Based on the transcribed data, the AI models reportedly assess customer sentiment and intentions. Furthermore, Talkdesk utilizes the collected information to enhance its own services and improve its AI models.
Stephen Andrews, one of the attorneys representing Gills, states, “Customers have a reasonable expectation that their private conversations with a company like Patagonia will remain confidential. Instead, these conversations are being intercepted and analyzed by a third party without the customer’s knowledge or consent.”
The complaint provides a detailed account of how Talkdesk’s software operates. When a customer contacts Patagonia via phone, their communication is simultaneously transmitted to Talkdesk’s servers, where it is intercepted and recorded. The software is designed to work with various communication channels, including phone calls, text messages, and online chats.
Gills, who has been a customer of Patagonia for over a decade, recounts her experience of calling the company’s customer service line in January 2024. She alleges that her conversation was intercepted and recorded by Talkdesk without her knowledge. “Had I known my call was being listened to by a third party, I would never have made that call,” she asserts.
The lawsuit claims that Patagonia’s privacy policy does not adequately inform customers about using Talkdesk’s monitoring products. While the policy mentions the collection of personal information, it does not explicitly state that conversations are being intercepted and analyzed by a third party. Moreover, the brief notification customers receive at the beginning of a call, stating that it “may be recorded for quality training purposes,” fails to disclose Talkdesk’s involvement or the extent of the monitoring.
This case raises significant questions about the ethical implications of using AI-powered monitoring tools in customer service operations. While these technologies can enhance service quality and operational efficiency, they also pose potential risks to customer privacy. The lawsuit argues that by failing to obtain explicit consent from customers, Patagonia and Talkdesk have violated the California Invasion of Privacy Act (CIPA).
The class action seeks to represent all California residents who have communicated with Patagonia via phone within the statute of limitations period. The plaintiffs are asking for damages, including statutory damages of $5,000 per violation, and an injunction to prevent Patagonia and Talkdesk from continuing these practices.
Stack Diary could not find a single mention of Talkdesk on any of Patagonia’s website pages. However, we did see a page on Talkdesk that lists Patagonia as one of its customers. The customer story document briefly mentions AI, indicating Patagonia’s interest in leveraging AI to streamline its contact center operations. Our investigation found that Patagonia does not disclose in its Terms or Privacy pages that customer calls are being sent to a third party and are used for the purposes outlined in the suit.
We’ve reached out to Patagonia for comment.
