According to court records, Robert L. Johnson Sr., Anthony L. Richardson, Sheila M. Sydnor and Deborah A. Sparks filed the suit in U.S. District Court in the Southern District of Illinois in early November.According to their lawsuit, credit scoring algorithms used by Allstate to calculate insurance premiums unfairly discriminate against people with similar insurance risk.
Allstate has "continuously and systematically engaged in an unlawful pattern and practice of unfair discrimination against consumers nationwide," and the "use of multiple differing insurance scoring schemes is not based on sound actuarial principals," the suit said. The plaintiffs claim that Allstate concealed, suppressed or omitted information about its practices, which they call unfair "immoral and unethical."
Insurance Information Institute has reported that the Federal Trade Commission has found that the use of credit scores leads to more accurate underwriting of auto insurance policies. There is a correlation between scores and the likelihood of filing a claim, said the institute report. The FTC also said insurance scoring does not discriminate.