Texas has filed a lawsuit against Allstate Insurance and its subsidiary company, Arity, accusing both of illegally collecting and selling the driving data of millions of Americans.
The lawsuit, from Attorney General Ken Paxton, claims that Allstate unlawfully tracked the location and movements of over 45 million consumers’ cell phones, using secretly embedded software in mobile apps like Life360, to then justify raising car insurance premiums.
According to a press release from Paxton’s office, the two companies engaged in a widespread data collection operation. They paid app developers to install Arity’s tracking software, which then collected “trillions” of miles’ worth of geolocation data from users. This data was then sold to insurance companies, which used it to assess driver habits and adjust insurance rates, often without the driver’s knowledge or consent.
In Texas, this practice is a clear violation of the Texas Data Privacy and Security Act (TDPSA), a state law designed to protect sensitive consumer data, according to Paxton.
The TDPSA requires companies to provide clear notice to consumers about how their data will be used and requires informed consent before collecting such personal information. Paxton’s lawsuit argues that Allstate and Arity failed to comply with these requirements, leaving millions of Texans unaware that their driving habits were being monitored whatsoever and later sold to third parties.
“Our investigation revealed that Allstate and Arity paid mobile apps millions of dollars to install Allstate’s tracking software,” Paxton said.
“The personal data of millions of Americans was sold to insurance companies without their knowledge or consent in violation of the law. Texans deserve better and we will hold all these companies accountable,” he added.
The lawsuit further alleges that Allstate and Arity used this vast trove of data to create what the companies claim to be the “world’s largest driving behavior database.”
When consumers requested quotes or renewed their car insurance policies, insurers allegedly used this database to illegally obtain data to justify premium hikes, which Paxton’s office argues is an unfair business practice.
Paxton’s lawsuit comes after another investigation into other companies, including General Motors, which he previously sued for similar sneaky data collection practices.
“Companies are using invasive technology to violate the rights of our citizens in unthinkable ways. Millions of American drivers wanted to buy a car, not a comprehensive surveillance system that unlawfully records information about every drive they take and sells their data to any company willing to pay for it,” Paxton said via another press release in August of 2024, after announcing the GM case.