Legal Liability For Recorded Messages

Legal Liability For Recorded Messages

“Your call is important to us.  Please remain on the line.  Due to the high volume of calls, your wait time is estimated to be 30 minutes.”

Who in their right mind, with any sense of customer service, would allow their business to provide a recorded message like this?

And is there legal liability for recorded messages that really do not attempt to address customer issues?

According to the facts of Kearns v Robinhood, there may be.

A 20 year old from Naperville, Illinois, Alex Kearns, living in Santa Clara, California, thought he lost $730,000 trading options.  “His panic and desperation grew as he was unable to communicate over a number of hours with anyone at Robinhood,” according to his family’s lawsuit.

Kearns had $16,000 in his account, impressive for a 20 year old, but thought he had lost that money, as well as putting his parents in jeopardy of large financial losses based on erroneous messages from Robinhood.  Robinhood sent Kearns an email stating he was required to deposit $178,000 into his account.  Worse, Robinhood only sent “auto-generarated” replies when Kearns tried to communicate with anyone.

The lawsuit states: “Alex rode to a railroad crossing on his bicycle and ran in front of an oncoming train, killing himself.”  Sadly, Kearns left a suicide note stating he did not know what he was doing when he entered into the trades, but actually, upon settlement of the options Kearns held, he more than covered his obligations.

The typical defense, that the actions of Alex Kearns were not reasonably foreseeable and could not have been predicted, may not work for Robinhood.   The lack of communication by Robinhood was coupled with false and erroneous emails that increase Robinhood’s culpability.

Under law, punitive damages will be awarded where a “defendant acts willfully, or with such gross negligence as to indicate a wanton disregard of the rights of others.”  Slovinski v. Elliot, 927 N.E.2d 1221 (Ill. Sup. Ct. 2010).

In the recent case of Sacramento v U.S. Bank, a Bank was hit with $3 million punitive damage award for repeatedly failing to correct mis-coded payments totaling a few thousand dollars.  The Court noted the Bank failed to offer any “real explanation for any of the errors its employees made, and never acted to correct its mistakes. . . We are not sure how many human errors [the Bank] gets before a jury can reasonably infer a conscious disregard of a person’s rights, but we are certain [the Bank] passed it.”

The moral of these cases to avoid large legal liability — use common sense, follow the Golden Rule of “doing unto others as ye would have done to you,” and review business practices with legal counsel who will be attuned to these issues.

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