The law firm Waddell Philips Professional Corporation has launched a proposed class-action suit against The Personal Insurance Company and its parent company, Desjardins General Insurance Group. The plaintiff, Kalevi Haikola, filed the suit against his automobile insurer because it accessed his credit file when he filed a claim following an accident.
The lawsuit is being filed on behalf of all customers whose credit files were assessed by The Personal during a claim process after Jan. 18, 2012. It has not yet been approved by the Court. The firm expects to receive an answer from The Personal and Desjardins within the next 60 days, Margaret Waddell, attorney in charge of this claim, told The Insurance and Investment Journal.
The proposed class action suit alleges that credit score information is irrelevant when an insurer is resolving an accident claim, and that therefore “the defendants could only be using this information for improper purposes, and against the interests of their customers.”
Alleges discrimination based on credit scores
The proposed class action alleges that the insurer was discriminating between people with good credit scores and those with lower scores or who refused to divulge the information. The files of the latter group would be subject to closer scrutiny, and a more in-depth investigation concerning potentially fraudulent claims.
Haikola complained to the Office of the Privacy Commissioner of Canada, arguing that the demand for information on his credit file was improper. The organization concluded that The Personal had violated the Personal Information Protection and Electronic Documents Act because Haikola had not given meaningful consent.
In February 2018, The Personal told the Commissioner that it had eliminated this practice from its claims assessment process.
Haikola affirms that for another claim after an accident in March 2018, The Personal asked for his consent to access his credit file and for more “intrusive” financial information.
“The claim asserts that the foremost obligation of an insurer is to act with utmost good faith toward its insureds. This obligation includes the duty to respect the privacy interests of insureds. Intrusive prodding into personal financial affairs, including credit scores, of insureds is inappropriate and unlawful under Canadian privacy legislation,” the law firm says.
Haikola is seeking damages and interests for defenders’ breach of privacy and for the defendants’ alleged bad faith based on continuing to collect personal financial information after they told the Privacy Commissioner that they stopped this practice.
The claim alleges that persons involved in motor vehicle accidents are particularly vulnerable in the hands of their insurance companies, and can reasonably expect their insurers to treat them fairly. This includes a reasonable expectation that they will not be given differential treatment based upon their personal financial circumstances.