Texas Accuses Allstate of Covertly Collecting Driving Data from 45 Million Americans to Increase Insurance Premiums
Texas has initiated legal action against Allstate and Arity, accusing them of improperly utilizing sensitive driving data from approximately 45 million Americans without their consent, thus infringing upon privacy regulations.
Texas Attorney General Ken Paxton has launched a lawsuit against Allstate Corporation and its subsidiary, Arity, alleging that they have engaged in illegal practices to collect, utilize, and sell sensitive driving and location data from more than 45 million Americans, including millions of Texans.
“Our investigation uncovered that Allstate and Arity compensated mobile applications with millions to deploy their tracking software,” Paxton stated. “Millions of Americans’ personal data was sold to insurance firms without their awareness or approval, violating the law. Texans deserve better, and we will ensure that these companies are held responsible.”
The Epoch Times has reached out to Allstate and Arity for their comments.
The legal filing claims breaches of the Texas Data Privacy and Security Act (TDPSA), the Data Broker Law, and the Texas Insurance Code’s stipulation against unfair and deceptive practices within the insurance sector.
The TDPSA is a data privacy regulation that came into effect in 2024 and requires clear notifications and informed consent when companies collect or sell sensitive personal information. It also offers enhanced protection for precise geolocation data, which can accurately identify an individual’s location to within mere feet. This lawsuit represents the first enforcement of the TDPSA by a state attorney general, alleging that Allstate and Arity did not adhere to these regulations by failing to notify consumers of their data practices or obtain express consent.
Related Stories
“Defendants covertly gathered much of their ‘trillions of miles’ of data by keeping active connections with consumers’ mobile devices and harvesting information directly from their phones,” the complaint states. “Millions of Americans, including Texans, were never notified about, nor did they consent to, the ongoing collection and sale of their data by the Defendants.”
The state’s allegations assert that data obtained via the embedded software was sold to other insurance companies for underwriting determinations.
“If a consumer sought a car insurance quote or needed to renew their policy, insurers would refer to the driving behavior data in the Defendants’ database. They would then leverage that data to justify increasing premiums, denying coverage, or cancelling policies,” the complaint states.
The lawsuit also contends that the tracking software occasionally misinterprets behavior, such as categorizing a passenger’s actions as risky driving or mistakenly identifying roller-coaster rides as evidence of poor driving habits.
“For instance, if a person were a passenger in a bus, taxi, or a friend’s vehicle, and that driver engaged in speeding, hard braking, or sharp turns, the Defendants would inaccurately attribute that ‘bad’ driving behavior to the passenger, not the actual driver,” the complaint asserts.
The lawsuit seeks substantial penalties under the TDPSA, including fines of up to $7,500 for each violation and demands that Allstate and Arity delete all unlawfully acquired data. It also requests restitution for affected consumers and measures to prevent future breaches.
