Insurance giant Allstate has been hit with a new class action lawsuit, accusing the company of allegedly using embedded tracking software on commonly used driving-related apps to log the driving behavior of tens of millions of Americans and then sell access to that data to other insurers to help determine customers' car insurance rates.
On Jan. 14, attorneys with the prominent plaintiffs' firms of Morgan & Morgan, of Orlando, Florida, and the Clifford Law Offices, of Chicago, filed suit against Northbrook-based Allstate in federal court in Chicago.
The lawsuit was filed on behalf of named plaintiff Demetric Sims, of Fulton County, Georgia.
Robert A. Clifford
| cliffordlaw.com
However, the plaintiffs are seeking to expand the action to include potentially 45 million others, whose movements were allegedly secretly monitored and then, at times, used against them.
The lawsuit takes aim at the use of so-called "software development kits" (SDK) which Allstate allegedly paid app developers to integrate into the programs commonly used by millions of Allstate customers and other U.S. drivers.
According to the complaint, these SDKs allegedly allowed Allstate to glean data from customers' mobile phones to track their location, speed, altitude, and bearing - essentially, allegedly allowing the company to track customers' movements in real time.
According to the complaint, since 2015, these SDKs, including the so-called Arity Driving Engine SDK, were allegedly embedded into Allstate's own apps, as well as other common apps, like Routely, Life360, GasBuddy, Sirius XM and Fuel Rewards.
According to the complant, the named plaintiff Sims allegedly was monitored through an SDK embedded in the Sirius XM app.
Developers of non-Allstate apps have not been named as defendants in the lawsuit.
According to the complaint, once the data was collected, Allstate and its affiliated corporate entities would allegedly add it to a database. The company would then use that data to guide its "own insurance underwriting and coverage decisions," but allegedly would also sell access to that data to other insurers to be "secretly used ... to justify increasing (customers') car insurance premiums, denying them coverage, or dropping them from coverage."
Allstate and its affiliated companies are the only insurance companies named as defendants in the lawsuit. The complaint does not specify which, if any, other insurers may have used Allstate's alleged collected data.
According to the complaint, customers allegedly never consented to the collection and sale of the data.
"Defendants never informed consumers about their extensive data collection, nor did Defendants obtain consumers’ consent to engage in such data collection. Defendants never informed consumers as to how they would analyze, use, and monetize their sensitive data," the complaint said.
According to the complaint, the data often also did not accurately reflect customers' actual driving behavior.
For instance, the lawsuit asserted the SDK would track the movements of customers' phones, whether or not the customer was actually driving a vehicle. The complaint asserts this would result in customers receiving poor driving scores for incidents that occurred while they were passengers in other people's cars, on public transportation or even while riding roller coasters.
The lawsuit accuses Allstate, Arity and other affiliated companies of allegedly violating federal wiretap law, violating the federal Computer Fraud and Abuse Act and of invasion of privacy.
The lawsuit seeks unspecified actual and compensatory damages, as well as court orders directing Allstate and its affiliates to repay any amounts they allegedly may have collected improperly as a result of the data collections.
The plaintiffs are represented by attorneys John A. Yanchunis, Ronald Podolny and Riya Sherman, of Morgan & Morgan's office in Tampa, Florida; and Robert A. Clifford and Shannon McNulty, of the Clifford Law Offices in Chicago.
“Allstate has allegedly built the ‘world’s largest driver database’ by collecting and selling data about tens of millions of people without their consent," Yanchunis and Clifford said in a joint statement issued in a release announcing the lawsuit.
"Our class action lawsuit alleges that Allstate undertook this data collection effort to increase its profits at the expense of unaware consumers and their privacy. We are fighting on behalf of our clients to put a stop to this purportedly improper data collection and hold Allstate accountable for its alleged surveillance and invasion of privacy.”
Allstate did not respond to the allegations in the lawsuit directly. Rather, a company spokesperson issued the following statement in response to a query from The Record:
“Arity helps consumers get the most accurate auto insurance price after they consent in a simple and transparent way that fully complies with all laws and regulations.”