Texas Attorney General Ken Paxton is suing Allstate and its subsidiary, Arity, for allegedly unlawfully collecting the data of more than 45 million Americans and using it to raise insurance rates. Paxton claims Allstate and Arity “would pay app developers to incorporate its software to track consumers’ driving data,” according to a press release.
The lawsuit states that Allstate embedded software in third-party apps, causing consumers to download it unknowingly. Once installed, the software allowed Allstate to track consumers’ location and movements in real-time, creating what is described as the “world’s largest driving behavior database.”
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The lawsuit further alleges that Allstate and other insurers used the consumer data collected through these third-party apps to increase premiums when quotes were requested or coverage was renewed.
In a statement, Paxton said: “The personal data of millions of Americans was sold to insurance companies without their knowledge or consent in violation of the law. Texans deserve better, and we will hold all these companies accountable.”
Paxton alleges that Allstate’s actions violated the Texas Data Privacy and Security Act (TDPSA). The law requires clear notice and informed consent regarding the use of Texans’ sensitive data.
However, a representative for Allstate Corporation told Fox News that its data collection system “fully complies with all laws and regulations.”
Paxton is seeking thousands of dollars in civil penalties per violation and “full restitution or restoration to all the consumers who suffered a loss.”
