Several news sources such as Intellihub and CEPro seem to suggest that Amazon's Echo home assistant constantly listens to conversations and sends them via the Internet to Amazon's servers. CEPro states that:
By saying a key phrase Amazon calls a “wake word” the Echo comes to life and begins listening for commands. By default, the wake word is Alexa.
If you reread that last sentence it may not make sense, especially if you are in the security field. According to Amazon, the Echo only listens for commands once it hears its wake word. How does it know when you have said the wake word if it wasn’t already listening?
Intellihub's article is similar in its sentiment:
The “Amazon Echo” device, a constantly-listening Bluetooth speaker that connects to music streaming services like Pandora and Spotify at the sound of a person’s voice, can be easily hacked and used by government agencies like the FBI to listen in on conversations.
(Note that I'm not particularly focused on exploring the hacking aspect of this question, since that would probably be too much for one question. My main focus is the always-on aspect and whether this sends data all the time.)
Neither article seems particularly keen to disclose a source for its claims, which suggests to me that they are unproven at best, or clickbait at worst.
Is the Echo always recording and sending data to the cloud, or are the above claims unsubstantiated? How does the Amazon Echo process data if it's not always sending data to servers in the cloud?