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Navy Federal Credit Union has been letting an artificial intelligence software company intercept, analyze, and record all its customer calls, according to a new lawsuit accusing the nation's largest credit union of putting its members' confidential, personal, and financial information at risk.

Navy Federal contracted Verint to provide real-time assistance and speech analysis of customer calls, the proposed class action filed Friday in California federal court claims. However, the content of the calls isn't just being used to provide Navy Federal the service it's paying for; Verint also purportedly uses the communications to train its AI, the suit says.

Avner Paulino, who filed the putative class suit, says he "expected that his conversations with Navy Federal would be kept confidential."

"He did not know that Verint was secretly listening to his conversation, and did not consent to his conversations being recorded and used by Verint," the suit says. "He would not have called Navy Federal if he had known."

Customer calls to Navy Federal are allegedly also routed to Verint, which means the software company intercepts the calls as they come in, according to the suit. Verint then uses its software to analyze what the customer says to assist Navy Federal, but it also uses this information for its own purposes, the suit claims.

Verint has an AI model called Verint Da Vinci that it uses to "analyze callers' words, tone, pitch, and pace, to determine what the caller is talking about and how the caller is feeling," but none of this is disclosed to customers calling Navy Federal, the suit says.

According to the suit, customers may have felt differently about calling and providing the credit union with sensitive information, including their social security number, bank account number, and income, if they had known a third party was listening and retaining the information.

The proposed class knows Navy Federal uses Verint because the software company claims the credit union is a client on its website and YouTube page, which includes a Navy Federal customer success story, according to the suit.

However, customers calling Navy Federal never have any reason to believe a third party is involved, according to the suit.

Instead, customers are told the call is being recorded "for quality assurance purposes," which only "tells reasonable consumers that Navy Federal itself may use the recording to train its customer service agents or improve its products," the suit says.

"It does not tell reasonable consumers that a third party (Verint) will intercept, record, and use the call for its own purposes," the suit says.

The parties did not immediately respond to requests for comment Monday.

The proposed class is represented by Stephen Andrews and Christin Cho of Dovel & Luner LLP.

Counsel information for Navy Federal and Verint was not immediately available.

The suit is Paulino v. Navy Federal Credit Union et al., case number 3:24-cv-03298, in the U.S. District Court for the Northern District of California.