Texas sues Allstate for collecting driver data without consent

By Jonathan Stempel

(Reuters) - Allstate (NYSE:ALL ) has been sued by the state of Texas, which accused the insurer on Monday of illegally tracking drivers through their cell phones without their consent and using the data to justify charging more for car insurance.

Texas Attorney General Ken Paxton said Allstate created the "world's largest driving behavior database," with data on more than 45 million Americans, by paying mobile app developers millions of dollars to secretly incorporate tracking software.

According to a complaint filed in a Texas state court near Houston, Allstate profited by using the data to raise premiums or deny coverage, and by selling the data to other insurers.

The software was designed beginning in 2015 by Allstate's data analytics unit Arity, and integrated into apps such as Fuel Rewards, GasBuddy, Life360 and Allstate-owned Routely, the complaint said.

Texas said Allstate has also recently bought data about vehicles' whereabouts directly from manufacturers to more accurately determine, not based solely on cellphone locations, when policyholders are actually driving.

Manufacturers that allegedly sold this data to Allstate include Toyota (NYSE:TM ), Lexus, Mazda, and Stellantis (NYSE:STLA )' Chrysler, Dodge, Fiat (BIT:STLAM ), Jeep, Maserati and Ram.

Allstate, based in Northbrook, Illinois, did not immediately respond to requests for comment.

The lawsuit accuses Allstate of violating Texas laws governing data privacy, data brokers, and unfair and deceptive acts by insurers.



It seeks restitution and other damages for consumers, civil fines of up to $10,000 per violation, and the destruction of illegally collected data.

Paxton filed a similar lawsuit last August accusing General Motors (NYSE:GM ) of installing technology on more than 14 million vehicles since 2015 to collect driver data, which it later sold to insurers and other companies without drivers' consent.

Source: Investing.com