Wood, Frances --- "Your telephone calls: recording and monitoring" [1996] PrivLawPRpr 19; (1996) 3(1) Privacy Law & Policy Reporter 14

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Your telephone calls: recording and monitoring

Frances Wood

Can you legally record a telephone conversation to which you are a party without telling the other person? Is it permissible for an organisation you have called to have a supervisor silently monitoring your conversation with the staff member? The answer to these questions relating to participant recording and monitoring has not been particularly clear at any point in the history of the Telecommunications (Interception) Act 1979 (Cth) and has recently become even murkier.

Commercial recording and monitoring

The confusion is increasing at a time when the commercial practice of participant recording or monitoring appears to be on the increase. Participant recording is when one of the parties to the conversation records it, participant monitoring is when another person at either the place being called or the place making the call listens in. Commercial uses of the practice include:

• Recording financial transactions undertaken over the phone, for example, buying and selling stocks and shares, placing bets, paying bills, and making credit card purchases. The rationale for recording in this circumstance is not hard to see: where there is no paper record of the transaction, the recording can be used to resolve disputes.
• Staff training and `quality management'. As `call centres' become more common as a way of handling large numbers of incoming and outgoing calls, organisations are using participant recording and monitoring both to raise the standard of their staff's work or to check up on it.
• Escalating queries and complaints. Organisations with large numbers of incoming calls will sometimes have a system by which an operator can alert a supervisor that there is a call that is in some way out of the ordinary, so that the supervisor can listen and intervene if deemed appropriate.

There are also non-commercial uses of participant monitoring and recording. For example, it is common practice for emergency services organisations to record the conversations made to 000. In some sad cases, such recordings may become part of the evidence to a coroner's inquiry. In other cases, the recording may become important in working out how that emergency was dealt with. Some non-commercial research, especially on sensitive matters, is conducted over the phone with the interviews being recorded -- but that is with the consent of the interviewee.

The practice of participant monitoring or recording is without doubt legal when it takes place with the knowledge of the parties to the conversation. The possibility of the practice being regarded as an `interception' only arises when one (or both) of the parties to the communication does not know. Interception is defined in s 6 (1) of the Telecommunications (Interception) Act 1979 (the Interception Act).

For the purposes of this Act, but subject to this section, interception of a communication passing over a telecommunications system consists of listening to or recording, by any means, such a communication in its passage over that telecommunications system without the knowledge of the person making the communication.

Informing the other party

The knowledge of the parties is the key. It is only when that knowledge is absent that the recording or monitoring becomes questionable. From a privacy point of view it may seem both straightforward and desirable to inform the other person, but, from a commercial perspective, it can be difficult or counter-productive to ensure that the communicating parties know about the recording or monitoring. For example, where the whole idea of the monitoring is checking on staff performance, it would defeat the purpose -- or so those who defend the practice would say.

In other cases, it may depend on whether there is a continuing customer relationship. In some of the examples given above, there is such a relationship and that means it would be possible for the organisation to inform callers about the company's practices, for example, in contract documentation, on bills or invoices, or even in the messages that the waiting caller has to listen to in the queue. In other of those examples, there is either a genuine or a perceived problem in informing the other party. Most people would probably agree that it would be highly undesirable if, when making an emergency call to 000, you had to wait while a recorded message was played telling you that the call would be recorded. There may be less agreement on the point that it would be hard for telemarketing organisations making `cold calls' to inform the other party that a supervisor may monitor the call, but looking at it from the telemarketer's perspective, it is true that having to do that would make it even harder to persuade somebody to persist with the call.

An exemption for participant monitoring?

It would be understandable if the policy intention was to exclude participant monitoring and recording from the sanctions of the Interception Act; it might be offensive and privacy-intrusive, but is it really criminal, deserving of the penalty of up to two years' imprisonment that the Interception Act provides? That raises the original question -- is there an exemption for participant monitoring?

It seems that there is meant to be. Section 6 (2) identifies some circumstances in which listening to or recording a communication would not constitute an interception. This section partially provides:

where a person lawfully on premises, to which a telecommunications service is provided by a carrier, by means of any apparatus or equipment that is part of that service -

(a) listens to or records a communication passing over the telecommunications system of which that service forms a part, being a communication that is being made to or from that service; ...

the listening or recording does not, for the purposes of this Act, constitute the interception of the communication.

If, however, the intention of this section was to exclude participant monitoring or recording from the category of prohibited interception, it does not succeed. There are a number of difficulties with the section, mostly caused by trying to keep up with the changes in the telecommunications industry.

Several elements have to be present before the exemption operates. These are:

1. The person doing the recording or monitoring has to be `lawfully on premises'.
2. The telecommunications service has to be provided by a carrier.
3. The apparatus or equipment has to be part of the service which is provided by the carrier.
4. The communication that is being recorded or listened to must pass over a telecommunications system of which the service in those premises is part.

There are substantial difficulties with this. In spite of referring to `a carrier', the section seems to reflect the monopolistic past when not only were all `services', whatever that might mean, provided by Telecom, now Telstra, but so was all equipment. For a while, this unfortunate drafting was overcome by a flexible approach which maintained that as long as the equipment was legally connected, that is AUSTEL-approved, it was `part of the service provided by the carrier'. The current approach to the section has been to argue that a court is more likely to accept an interpretation that this section refers to services actually operated by a carrier. The effect of this is, if the interpretation is sound, that only `carriers' or those using carrier-provided equipment may, as participants to a communication, record or monitor it, which is clearly an anomalous outcome.

The anomaly, however, still allows a surprising number of organisations to record and monitor telephone conversations as participants. The Interception Act includes `service providers' in its definition of `carriers', and the Telecommunications Act 1991, to which the Interception Act refers in its definition, has a broadly accommodating approach to providers of eligible services, such that if an organisation has telecommunications equipment which it uses to provide a service to a third party, it can argue that it is a service provider. This approach would include:

• banks which offer telephone banking or provide EFTPOS;
• hotels with facilities for their guests to make calls, especially where they charge for it;
• emergency service organisations which use telecommunications facilities to respond to calls; and
• security firms with back-to-base alarm systems.

This is where the matter currently rests as far as the Interception Act is concerned.

Pip-tone requirements

Another element in this messy piece of privacy protection is AUSTEL's `pip-tone' requirement.[<sup>1]</sup> This requirement occurs in the Technical Standard 002.<sup>[2]</sup> Inherited or `grandfathered' from the old Telecom standards, it requires that where a conversation is recorded or monitored, tones of specified frequency, volume and duration must be inserted.

The requirements, in their original Telecom form, predate the Interception Act and would perhaps have not sat too uncomfortably with the requirements that are in s 6(2). When Telecom was the only provider of apparatus and equipment, that equipment came with the tones built in, unless Telecom was persuaded either to provide a dispensation or to install the equipment without the tones as part of the service it provided.

Even under the interpretation that `approved' equipment was enough to activate the s 6(2) exemption, the tone requirements could be reconciled with the Interception Act. With the current interpretation, however, the pip-tone requirement is at odds with the Interception Act. Pips are not sufficient to ensure that the other party knows of the recording or listening. It is an unfortunate effect if those organisations dutifully inserting pips thereby believe that there is no shadow on their practice of recording or monitoring calls. It is also unfortunate if the companies which have taken the trouble to apply to AUSTEL for an exemption from the pip-tone requirement mistakenly believe that their practice in cording is thereby legitimate, and that there would no question about the admissibility of the recordings.

What now?

There is general agreement that the current situation is unworkable. The initial problem is to work out what the policy position should be, and then the next hurdle is to work out how to implement it. The Interception Act was significantly amended in December 1995 to take account of both the `Review of the Long Term Cost Effectiveness of Telecommunications Interception'[^3] and the finding arising from the Casualties of Telecom (COT) cases that the carrier exemption for interception was too broad,^[4] so that further amendment is not likely to be seen as a priority.

What should the policy position be? It is not the first time this question has been asked. An interdepartmental committee in the early 1980s recommended changes, but could not agree on the direction of the changes. A 1991 review of the Interception Act by the Attorney-General's Department^[5] recommended the removal of restrictions on participant monitoring, a recommendation which has not been acted upon. Its arguments were:

• since only recording in the passage of the communication that is covered in the Act, not, for example, acoustic recording from a loud speaker phone, there can be no assumption by parties that the conversation is not being recorded;
• participant recording is legitimate and valuable in some circumstances, for example, recording classes in distance education, recording transactions by stockbrokers, recording telephoned bomb or extortion threats; and
• the provision is hard to enforce and will become more so, as the number of providers of telecommunications services increase.

The recommendation was strongly opposed by the NSW Council for Civil Liberties. More recently, the Privacy Commissioner spoke strongly against the removal of restrictions, with particular reference to the pip-tone requirements saying,[^6]

As I understand it, the only control [on participant monitoring or recording] is whatever AUSTEL can procure through the pip-tone requirements that involve the use of attached equipment. Recently I received a communication from AUSTEL which suggested that its advisory panel wanted to drop the pip-tone requirement ...

I wrote my usual letter of indignation in response to such a proposal and it has not proceeded. But I give that as an indication of the broader context of this discussion. One has to look at the whole tapestry of private communications relying on technology in this community and think about the extent to which the right to privacy is protected in those environments.

A likely approach is a rewrite of s 6(2) which would limit participant monitoring, except for a range of public interest situations, with perhaps additional allowance for authorisations in certain circumstances.

AUSTEL's Privacy Advisory Committee plans to explore the issues of participant recording and monitoring over the next few months, and its deliberations will be a significant source of input to the Security Law and Justice Branch of the Attorney-General's Department which administers the Interception Act. As well, the exposure draft of the telecommunications legislation for post-1997 which was issued in December 1995 under the previous Government nominated participant monitoring and recording as one of the areas in which a code of practice should be developed. Whether the new Government will adopt this draft legislation is not known at the time of writing.

The status of participant monitoring and recording is very confused. The basic problem appears to be that the technology has left behind any community consensus that might have existed. It is to be hoped that the various initiatives in the area can be harmonised, adequate consultation undertaken, and a basis for achieving some coherence identified.

Frances Wood, Manager, Law Enforcement Liaison, AUSTEL.

tel [phone]; e-mail [e-mail]

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[1] AUSTEL's 1994 Discussion Paper is described in `Do They Give You the Pip?' AUSTEL -- Recording and Monitoring Telephone Conversations -- Tone Requirements Discussion Paper, May 1994 < 1 PLPR 76>.

[2] Analogue Interworking and Non-Interference Requirements for Customer Equipment Connected to the Public Switched Telephone Network.

[3] 1 March 1994; this review was carried out by PJ Barrett, then of the Department of Finance. (See `The Barrett Review' < 1 PLPR 161> and 185).

[4] Senate 7 December 1994, p 4092, (First Reading for the Telecommunications (Interception) Amendment Bill 1994).

[5]Review of Telecommunications (Interception) Act 1979, Attorney-General's Department 1991, pp 14-15.

[6] Senate Legal and Constitutional Legislation Committee, Tuesday, 21 May 1995, p 447. (Reference: Telecommunications (Interception) Amendment Bill 1994).