Texas Attorney General Takes Action Against Allstate and Arity for Illegal Collection and Sale of Driving Data
Texas Attorney General Ken Paxton has filed a lawsuit against Allstate and its subsidiary, Arity, for unlawfully collecting, using, and selling the driving data of over 45 million Americans. This action follows an investigation that uncovered the secret use of software embedded in popular mobile apps, such as Life360, which was used to track the location and movements of consumers' cell phones without their knowledge or consent. Allstate and other insurers allegedly used this covertly collected data to justify raising insurance premiums for Texas drivers.
According to the lawsuit, Allstate, through Arity, paid app developers millions of dollars to embed tracking software into their apps, which allowed the company to collect massive amounts of location data from consumers across the country. This data, amounting to trillions of miles of driving information, was used to create what was described as "the world’s largest driving behavior database." When consumers sought insurance quotes or renewed their policies, Allstate and other insurers reportedly used this data to justify increasing their premiums.
The lawsuit alleges that Allstate’s actions violated the Texas Data Privacy and Security Act (“TDPSA”), which provides strong protections for sensitive data, including precise geolocation information. Under this law, companies are required to provide clear notice and obtain informed consent from consumers before collecting or using their sensitive data. However, Allstate never provided Texans with proper notice, nor did they secure consent before gathering or selling their data.
Attorney General Paxton emphasized that this case marks the first-ever enforcement of the TDPSA, making it a significant moment for consumer protection in Texas. He noted that Allstate and Arity's actions were not only deceptive but also a clear violation of the privacy rights of millions of Americans. Paxton vowed to hold the companies accountable for their unlawful practices and to continue working to protect Texans' privacy.
This lawsuit adds to the growing number of cases related to the collection and sale of sensitive consumer data, following Paxton's earlier legal action against General Motors for similar violations involving driving data. Paxton has also opened investigations into several other car manufacturers for their role in secretly collecting and selling data without consumer consent.
For businesses, this case is reminder of the importance of complying with data privacy laws, especially when handling sensitive information like geolocation data. With increased scrutiny on how companies collect, use, and share personal data, it’s crucial to ensure transparency and secure informed consent from consumers to avoid significant legal risks and reputational damage.
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