Houzz settles wiretapping case with California attorney general

Palo Alto startup Houzz, which runs a popular shopping platform for home remodeling and interior design, has settled with California Attorney General Kamala Harris over allegations the company recorded phone calls without notifying customers or employees.

“Houzz violated the trust of its professionals, customers, and employees by recording calls without permission,” Harris, who is also running for U.S. Senate, said in a written statement Friday announcing the resolution of the case. “This settlement holds Houzz accountable for violating state privacy laws and ensures that the company will stop recording calls without permission.”

Houzz must pay $175,000 and destroy secretly recorded calls, most of which were with home improvement and remodeling professionals but included customer calls and employees’ personal calls, according to the attorney general’s office, which said the recordings violated state laws against wiretapping and eavesdropping.

Houzz did not return a request for comment Friday. Co-founders Adi Tatarko and Alon Cohen were inspired by their own home remodeling project to start the website in 2009, and the company’s online platform and mobile apps now count millions of users.

The recordings by Houzz’s Irvine branch office between March and September 2013 were intended for training and quality-assurance purposes, according to the attorney general’s office, but the company did not seek to notify or obtain consent from all parties. The company stopped recording calls and cooperated with the investigation after the state contacted the firm in fall 2013.

A proposed settlement filed Friday in Santa Clara Superior Court requires Houzz to hire a chief privacy officer.

Above: California Attorney General Kamala Harris spoke during the Safer Internet Day conference at Facebook heaquarters in Menlo Park on Feb. 10. (John Green/Bay Area News Group)

 

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