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Waddell represents proposed class in lawsuit against insurer

Toronto class-action lawyer Margaret Waddell is representing a plaintiff who has launched a proposed class-action lawsuit against an Ontario auto insurer over allegedly using credit scores in adjusting accident benefits claims, reports Canadian Underwriter. Read Insurance Journal

Waddell, a partner with Waddell Phillips Professional Corporation, says counsel is working on “court materials to support the motion for certification.” She is hoping to have the motion heard before the end of 2018. 

“That’s a pretty aggressive schedule for this kind of litigation, but the Federal Court moves very quickly,” Waddell notes.

The proposed lawsuit, filed on April 10, is on behalf of all Canadians who made statutory accident benefits claims with the insurance company after Jan. 18, 2012.

None of the allegations has been proven in court. 

The statement of claim asserts that the insurer does not have a “direct business need” for credit scores from accident benefits claimants and is in violation of the federal Personal Information Protection and Electronic Documents Act, says the article. 

The representative plaintiff is a man who, after suffering injuries in an auto accident in 2012, made a claim with the insurer. It is alleged in the statement of claim that he was asked to give consent for the insurer to get a FICO score. 

“That score is described by data analytics provider Fair Isaac Corporation as one that is derived by running data from credit reporting agencies through a scoring model developed by FICO,” says the article. 

In 2014, the man filed a formal complaint with the federal Office of the Privacy Commissioner (OPC), it says. 

The article points to the OPC’s resulting report, released in October 2017, where the Office of the Privacy Commissioner said the use of credit scores in adjusting an auto insurance claim “is not something that a reasonable person would consider to be appropriate.”

The insurer that was subject to the 2014 complaint to the OPC had argued that “it has a direct business need for credit scores in order to detect and prevent fraud, and to control costs and clients’ premiums,” the Office of the Privacy Commissioner noted in the report, but the OPC disagreed with this argument.

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