Privacy class-action lawsuit against insurer over credit scores could settle

A privacy class-action lawsuit against The Personal Insurance Company could be settled for about $2.2 million, the plaintiffs’ law firm said Friday.

In 2018, Waddell Phillips Professional Corporation filed the lawsuit in Federal Court on behalf of auto claimants with The Personal who had their credit score information accessed by the insurer.

The Personal had been checking some clients’ credit scores when investigating auto claims, if the clients consented, but eventually stopped doing this, said Joe Daly, a spokesperson for parent company Desjardins General Insurance Group Inc., on Friday. The Personal denies any liability or wrongdoing. “We were disputing [the lawsuit] but we decided it made sense to come to an agreement to resolve it,” Daly told Canadian Underwriter.

The settlement still requires court approval but has been agreed upon by the parties. A hearing is scheduled Oct. 7 at Federal Court in Toronto.

Kalevi Haikola made an auto accident benefits claim with The Personal in 2012. Haikola was listed as the representative plaintiff in the class action. The statement of claim alleges that Haikola was asked to give consent for The Personal to get a credit score on FICO.

The statement of claim further alleges that Haikola made a complaint with the federal privacy commissioner.

In a 2017 report on an investigation into a complaint against an unnamed auto insurer, the Office of the Privacy Commissioner noted it has previously found assessing risk and calculating premiums” for home insurance “is an appropriate purpose for collecting credit scores.”

That insurer was later identified as The Personal. For accident benefits, the privacy commissioner noted that the Personal agreed to stop using credit scores.

“We admit we checked credit scores as a way to triage claims as they came in to sort of get a first hint at whether fraud could have been involved,” Daly said Friday, adding claimants were asked for their consent.

“If there was a bad credit score we might have taken a second look at it. It was a way of speeding up the process. We don’t feel we did anything wrong,” said Daly.

Waddell Phillips said Friday there are about 8,525 class members, so if all of them get paid then each class member would get about $150.

The law firm says it plans to ask the court to approve a payment of $500,000 in legal fees, not including disbursements and taxes, plus a stipend to Haikola for the work he did to pursue the lawsuit.

Plaintiffs who allege someone is violating Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) can take the alleged violator to Federal Court.