Consumer
advocates vow to fight on to protect Oregon consumers even though the
insurance industry spent $5 million to kill Measure 42, a consumer
protection measure to stop insurance companies from using credit scores
to raise insurance rates.
“It’s
outrageous that out-of-state insurance companies poured millions into
Oregon trying to confuse voters with an onslaught of misleading
television ads,” said Laura Etherton, OSPIRG consumer advocate.
"Unfortunately,
the insurance industry's $5 million campaign against Measure 42 created
a lot of confusion about what was at stake on election day," said Norma
Garcia, Senior Staff Attorney with Consumers Union. "Credit scoring is
unfair when it comes to insurance. Many good drivers and responsible
homeowners get stuck with higher premiums just because insurance
companies think their credit score is not high enough. Even consumers
with good credit can pay more than they should because of this unfair
practice."
In
2003 the Oregon Legislature gave some Oregonians protections against
the use of credit history for insurance renewal rate setting and
cancellations. Measure 42 would have extended these same protections to
new customers, including those who are previously insured but switch
insurance companies, so that all Oregonians could enjoy the same
rights.
Although
Measure 42 was defeated, the problems for consumers when insurance
companies use credit data remain. Consumers Union and OSPIRG urged the
Oregon Legislature and state regulators to step in and level the
playing field by extending protections to new policyholders who deserve
the same protections from the unfair consequences of credit scoring.
Protections
would be necessary to protect consumers from being penalized with
higher rates because of lower credit scores caused, for example, by
filing a medical bankruptcy, owing higher balances on credit cards,
being a victim of identity theft or having an error on a credit report.
Garcia and Etherton point out factors like these do not make the
consumer a worse driver, or more likely to have a house fire.
OSPIRG
and Consumers Union believe that how much consumers pay for insurance
should depend primarily upon factors directly related to the insured
activity in rate setting, such as a consumer’s driving experience and
record in auto insurance, and the safety of a home in homeowners
insurance.
“Insurance ought to be fair and transparent for consumers,” said Etherton, “Credit scoring just doesn’t belong.”
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Oregon
State Public Interest Research Group (OSPIRG) is a statewide non-profit
non-partisan public interest advocate. OSPIRG’s mission is to deliver
persistent, result-oriented public interest activism that protects our
environment, encourages a fair, sustainable economy, and fosters
responsive, democratic government.
Consumers Union, publisher of Consumer Reports,
is an independent, nonprofit testing and information organization
serving only the consumer. We are a comprehensive source of unbiased
advice about products and services, personal finance, health nutrition,
and other consumer concerns. Since 1936, our mission has been to test
products, inform the public, and protect consumers.
