California law requires that, before any party involved in a phone call can record the conversation, all parties must be made aware they are being recorded. Violations of that law can get quite costly; just ask Wells Fargo, which has to ante up $8.5 million to close a state investigation into the bank’s repeated invasions of privacy.

The state sued Wells [PDF] back in February, alleging that the bank had violated sections 632 and 632.7 of the California Penal Code by failing to “timely and adequately disclose its automatic recording of phone calls with members of the public.”

Of the $8.5 million, a total of $7.6 million in civil penalties will be divvied up between the state attorney general’s office and the five counties — Los Angeles, San Diego, Alameda, Riverside, and Venture — whose district attorneys were involved in the investigation.

Wells Fargo will also $250,000 each to the Privacy Rights Clearinghouse and the Consumer Protection Prosecution Trust Fund.

The bank says it will implement an internal compliance program to ensure calls are no longer recorded without consent. Prosecutors concede that Wells Fargo, which is not admitting any liability, cooperated after learning of the investigation.

“Protecting the privacy of California consumers is increasingly crucial as technology rapidly develops and becomes a bigger part of our lives,” said Attorney General Harris. “This settlement holds Wells Fargo accountable for violating the privacy of its customers by recording calls without providing adequate notification, and ensures that the bank makes the changes necessary to protect the privacy of its customers.”

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