PIPEDA Report of Findings #2017-003: Insurance company collected and used credit score for inappropriate purpose during auto insurance claims assessment process
An individual complained that an insurance company collected and used his credit score without meaningful consent during an auto insurance claims assessment, over-collected his credit file, and used the score for an inappropriate purpose. The OPC found that the insurance company failed to demonstrate that collecting and using credit scores for fraud detection in auto claims was an appropriate purpose under PIPEDA subsection 5(3) or a "direct business need" under Ontario's Consumer Reporting Act. The OPC also determined that the company did not obtain meaningful consent because it failed to clearly advise the complainant that providing his credit score was optional, contrary to Principle 4.3. Furthermore, the company was found not to be open about its practices regarding credit score collection and use, violating Principle 4.8.1, due to insufficient notifications and inaccurate employee scripts. The allegation of over-collection was not substantiated, as only the credit score was provided. In response to the OPC's preliminary report, the insurance company agreed to cease collecting credit scores for auto accident benefit claims and review its practices for other insurance types. The matter was concluded as well-founded and conditionally resolved, pending the full implementation of these agreed-upon changes.
- 1Whether collecting and using a credit score for fraud detection during auto insurance claims assessment is an appropriate purpose under subsection 5(3) of PIPEDA.
- 2Whether the insurance company had a "direct business need" for credit scores under Ontario's Consumer Reporting Act (CRA) s.8(1)(d)(vi) for fraud detection in auto claims.
- 3Whether the insurance company over-collected personal information by obtaining the complainant's entire credit file.
- 4Whether the insurance company properly identified the purposes for collecting the complainant's credit score under Principle 4.2.
- 5Whether the insurance company obtained meaningful consent for collecting the credit score, specifically if it advised the complainant that providing the information was optional, under Principle 4.3.
- 6Whether the insurance company was open about its policies and practices regarding credit score collection and use under Principle 4.8.1.
- Appropriate purpose: Collection and use of credit scores for fraud detection not justified
- Meaningful consent: Consent not meaningfully obtained
- Openness: Company not open about practices
- Over-collection: Allegation not substantiated
- Resolution: Complaint well-founded and conditionally resolved
Complaint well-founded and conditionally resolved
The OPC found that the insurance company failed to demonstrate an appropriate purpose for collecting credit scores in auto claims, did not obtain meaningful consent, and lacked openness in its practices, but committed to corrective actions.
The insurance company agreed to stop collecting and using credit scores for auto accident benefit claims by the end of April 2017 and to conduct a comprehensive review of its procedures for other types of insurance and purposes by the end of June 2017 (or December 2017 if major system changes were needed).
- subsection 5(3) PIPEDA
- Principle 4.2 PIPEDA
- Principle 4.3 PIPEDA
- Principle 4.3.2 PIPEDA
- Principle 4.4 PIPEDA
- Principle 4.4.1 PIPEDA
- Principle 4.8.1 PIPEDA
This summary is informational only and not legal advice.
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