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Lemonade Insurance Deceptive Collection of Biometrics Class Action

Lemonade Insurance Company and its related companies do business digitally, using artificial intelligence (AI) technology. But the complaint for this class action alleges that, in the process, it collects, stores, and uses customers’ biometric data, without their knowledge and “despite Lemonade’s express representations to the contrary[.]” The complaint alleges violations of New York state laws, including its Uniform Deceptive Trade Practices Act.

The class for this action is all individuals whose biometric data was collected, captured, stored, used, transmitted, received, or otherwise obtained or disseminated by Lemonade.

Lemonade and its associated defendants in this case (Lemonade Insurance Agency, LLC, Lemonade Ltd., and Lemonade Life Insurance Agency, LLC) do business online digitally. For things like price quoting, sales of insurance, and settling claims, it uses online chatbots. Lemonade, the complaint says, believes this manner of working makes for “superior assessment and quantification of risk, which in turn leads to improved claims loss ratio.” It also allows the company to save money on human insurance brokers and actuaries.

The complaint quotes the company’s CEO as saying that its “one million customers translates into billion of data points, which feed [its] AI at an ever[-]growing speed.”

Companies are increasingly using biometric data for their own purposes. But consumers are not comfortable with freely giving out identifiers that cannot be replaced if they are compromised or stolen. The complaint claims that “less than 10% of consumers willingly give up their biometrics in exchange for shopping for online products and services in 2018.”

Lemonade seems to understand this reluctance, the complaint says, promising customers that “it will honor their privacy choices and fully disclose the type of information Lemonade collects, why it collects it, and what it does with it. In fact,” the complaint claims, “Lemonade expressly and impliedly assured its customers … that it will not collect, require, sell or share consumers’ biometric data in the context of consumers’ use of Lemonade’s services in its Data Privacy Pledge.”

Unfortunately, the complaint alleges that Lemonade has now “confirmed that the Company utilizes facial recognition technology, a form of biometric data, for fraud detection purposes.

How does it do this? The company’s claims submission process requires that customers upload a video of themselves telling about the circumstances of their claims. In a now-deleted series of tweets, the complaint alleges, Lemonade admitted that it uses AI that “analyzies [videos submitted by consumers] for fraud [and that it] can pick up non-verbal cues that traditional insurers can’t.” According to the complaint this is done with the use of facial recognition technology.

Lemonade has claimed this helps it lower its loss ratio and thus its costs. The complaint alleges that Lemonade “surreptitiously collects, stores, analyzes, and uses [customers’] biometric data without their knowledge or authorization” and gets a substantial benefit from doing so.

Article Type: Lawsuit
Topic: Privacy

Most Recent Case Event

Lemonade Insurance Deceptive Collection of Biometrics Complaint

August 20, 2021

Lemonade Insurance Company and its related companies do business digitally, using artificial intelligence (AI) technology. But the complaint for this class action alleges that, in the process, it collects, stores, and uses customers’ biometric data, without their knowledge and “despite Lemonade’s express representations to the contrary[.]” The complaint alleges violations of New York state laws, including its Uniform Deceptive Trade Practices Act.

Lemonade Insurance Deceptive Collection of Biometrics Complaint

Case Event History

Lemonade Insurance Deceptive Collection of Biometrics Complaint

August 20, 2021

Lemonade Insurance Company and its related companies do business digitally, using artificial intelligence (AI) technology. But the complaint for this class action alleges that, in the process, it collects, stores, and uses customers’ biometric data, without their knowledge and “despite Lemonade’s express representations to the contrary[.]” The complaint alleges violations of New York state laws, including its Uniform Deceptive Trade Practices Act.

Lemonade Insurance Deceptive Collection of Biometrics Complaint
Tags: Biometric Data, Taking/Storing/Using Biometric Data, Your Privacy