Texas Attorney General Ken Paxton has filed a lawsuit against Allstate Insurance Company, alleging the company and its subsidiary Arity engaged in unauthorized collection and sale of mobile device data from Texas residents. The legal action follows a pattern of increased privacy enforcement by the Texas AG’s office, which previously took action against Meta over biometric data collection practices in the state.
According to the lawsuit, Allstate allegedly collected precise location data and movement information from cell phones without obtaining explicit consent from device owners. The collected data was reportedly used to adjust insurance premiums based on drivers’ habits and locations, a practice known as usage-based insurance (UBI) that has become prominent in the insurance industry over the past decade.
The legal action comes amid increased regulatory scrutiny of location data collection practices. The Federal Trade Commission has recently taken similar action against location intelligence company Gravy Analytics for collecting phone location and behavioral data without consumer consent. The Gravy Analytics case exposed how location data brokers can track millions of smartphone users through seemingly innocuous mobile apps.
Allstate has issued a denial of the allegations, though the company has not provided detailed responses to the specific claims made in the lawsuit. The insurance provider’s telematics program, which tracks driving behavior through mobile devices, has been operational since 2010, making it one of the early adopters of mobile-based driver monitoring in the industry.
The case highlights ongoing discussions around data privacy in the insurance industry, particularly regarding the collection and use of mobile device data for premium pricing. The practice of using telematics and location data for insurance pricing has become more common in recent years, though regulations require transparency and consent. The intersection of mobile technology and insurance pricing has drawn increasing attention from privacy advocates and regulators concerned about consumer data rights.
The lawsuit coincides with other data privacy developments in the automotive sector, including a reported vulnerability in Kia’s online infrastructure that potentially exposed customer information through Vehicle Identification Numbers (VINs). These incidents reflect broader concerns about data security in connected vehicles and automotive services, an issue that has become more pressing as vehicles increasingly integrate with mobile technology and collect detailed user data.
Sources: Joe Pearce, Law.com
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