Supreme Court to Hear Insurance Industry Credit Score Cases

by Mike Bevel, CollectionIndustry.com

The insurance industry wants the Supreme Court to, if not directly approve, at least not stand in the way, when it quotes higher premium rates to customers with bad credit.

Insurance companies of late have faced a steady wave of class-action lawsuits alleging they violated the Fair Credit Reporting Act by not telling consumers that their low credit scores resulted in higher quotes for insurance coverage. It’s a common practice, the insurance industry argues, to review credit scores and offer lower rates to customers with higher credit scores.

Insurances companies are challenging in response to a Ninth U.S. Circuit Court of Appeals, San Francisco, decision. The court says that companies must let consumers know when higher premiums are the result of poor credit scores. The insurance industry says this sets a lower standard of liability under the Fair Credit Reporting Act for failing to disclose just how much low credit score factors adversely impact an insurance price quote.