Canadian Underwriter

Auto insurer faces lawsuit over credit scores in accident benefits claims

May 16, 2018   by Greg Meckbach

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A major Ontario auto insurer is facing a lawsuit over allegedly using credit scores in adjusting accident benefits claims.

The proposed class-action lawsuit, filed April 10 in Federal Court, is on behalf of all Canadians who made auto claims with The Personal Insurance Company after Jan. 18, 2012 “and who had their credit score information accessed by The Personal or its agents.”

The insurer will be filing a statement of defence “in due course,” a spokesperson for Desjardins General Insurance Group Inc., The Personal’s parent company, told Canadian Underwriter Tuesday. DGIG was the top Ontario private passenger auto underwriter in 2016, with $1.85 billion in direct premiums written and 17.9% market share, according to Canadian Underwriter’s 2017 Statistical Guide.

Allegations that The Personal accessed credit scores of accident benefits claimants have not been proven in court. The statement of claim asserts that The Personal does not have a “direct business need” for credit scores from accident benefits claimants and is in violation of the federal Personal Information Protection and Electronic Documents Act.

“The Personal respects and values the privacy of its customers but given the pending litigation, we cannot comment any further on the action,” the Desjardins spokesperson wrote to Canadian Underwriter.

Lawyers with Waddell Phillips Professional Corporation, the law firm representing plaintiff auto claimants, are working on “court materials to support the motion for certification,” lawyer Margaret Waddell said Tuesday in an interview.

Waddell Phillips is aiming towards having the motion for certification heard “hopefully before” the end of 2018, Waddell added. “That’s a pretty aggressive schedule for this kind of litigation, but the Federal Court moves very quickly,” she noted.

There is no indication right now how many people may be included in the class, Waddell said.

The representative plaintiff is Kalevi Haikola. After an auto accident in 2012, in which he was injured, Haikola made a claim with The Personal. It is alleged in the statement of claim that Haikola was asked to give consent for The Personal to get a FICO score. That score is described by data analytics provider Fair Isaac Corporation as one that is derived by running data from credit reporting agencies through a scoring models developed by FICO.

In 2014, Haikola a filed formal complaint with the federal Office of the Privacy Commissioner.

In an OPC report released in October, 2017, which did not name The Personal, the Office of the Privacy Commissioner said the use of credit scores in adjusting an auto insurance claim “is not something that a reasonable person would consider to be appropriate.”

The insurer that was subject to the 2014 complaint to the privacy commissioner had argued that “it has a direct business need for credit scores in order to detect and prevent fraud, and to control costs and clients’ premiums,” the Office of the Privacy Commissioner added at the time.

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1 Comment » for Auto insurer faces lawsuit over credit scores in accident benefits claims
  1. David Potter says:

    There is nothing that can justify this invasion of privacy. It scares me to think that while all this was going on not one individual thought to suggest that this was not a good idea.

    Utmost good faith has given way to an absence of ethics.

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