Texas Takes Legal Action Against Allstate Over Alleged Data Privacy Violations

Texas Attorney General Paxton sued Allstate. He alleged data privacy breaches. Arity LLC, Allstate’s unit, was also named. They are accused of illicit data collection. Over 45 million drivers were affected. Allstate supposedly tracked drivers secretly. Tracking software was embedded in apps. Location data was extensively harvested. Movement data was also amassed. A driving behavior database was constructed. This data was used to raise premiums.

Paxton accused Allstate of violating the Texas law. The Texas Data Privacy Act was allegedly breached. Penalties are being sought. Restitution for consumers is also desired. Allstate refutes the charges. They claim data privacy compliance. Allstate and Arity purportedly collected trillions of miles. The data came via mobile applications. Life360 was among the platforms used. The data was used for underwriting. It also fueled premium increases. This occurred without consent, they said.

Paxton stated, “Allstate paid apps for software installs.” Tracking software was secretly added. Data of millions was sold. This happened without consent. This is a law violation. Texans deserve better, he added. All companies will be held accountable.

Texas law requires clear notice. Consent must be obtained prior to collection. Sensitive data cannot be sold without consent. Allstate failed these requirements, the lawsuit asserts. This marks the first enforcement action. The privacy law is comprehensive. The state seeks a court ruling. Allstate’s practices are deemed unlawful. They must destroy all collected data. This includes data held by others.

Texas wants $17,000 penalties per violation. This is for both the state’s insurance code and the privacy law. Affected consumers may receive restitution. This case spotlights data collection scrutiny. It particularly highlights the insurance industry. Telematics programs are becoming common. These programs utilize driving data. This data informs insurance policies. These programs require clear consent. Transparency is also essential. Industry experts underscore consumer trust.

Allstate denies wrongdoing. Arity operates transparently, they said. They assist consumers with insurance pricing. They claim compliance with laws. These cover data collection and use.

The lawsuit outcome is significant. It may affect industry data privacy. This case may set precedents. Insurers may reevaluate their data practices. They might ensure state law compliance. Regulators focus on data privacy. This case may trigger industry-wide changes. This might force compliance across insurers. Allstate’s data practices are challenged. The case highlights consumer data risks. Transparency will be essential going forward.

Sources

• Texas attorney general sues Allstate and Arity | Insurance Business America, Insurance Business America.
• Texas AG Ken Paxton sues Allstate over collection of driver data – Insurance News | InsuranceNewsNet, InsuranceNewsNet.
• Texas Lawsuit Alleges Allstate Illegally Collects Driver Data, Insurance Journal.
• Texas Sues Allstate for Allegedly Tracking People To Raise Insurance Prices – Newsweek, Newsweek.