Kreidler seeks ban on insurers’ use of credit information
Kreidler added that he wanted to ban this practice when the industry started using it nearly ten years ago. “It’s discriminatory and blatantly unfair – especially in today’s economy.”
The insurance industry argues that credit scoring rewards people for being responsible. But Kreidler says people making responsible decisions are being harmed by the practice.
He’s heard from consumers whose insurance rates were increased because they:
- Consolidated their credit cards, lowered their credit card limits or canceled their cards.
- Opted to buy a large ticket item with 12-months deferred interest.
- Took advantage of a 10 percent discount if they used their store card to make a purchase.
- Do not have enough active credit cards or bank accounts.
- Opened a new credit card eight years ago to get frequent flyer miles.
“What do any of these choices have to do with how these people drive their cars or how they treat their homes,” he asked. “Nothing. But get ready to hear the insurance industry’s scare tactics. They’ll threaten that banning credit scoring will lead to higher insurance rates. I believe successful companies will find fair ways to reward responsible drivers and property owners with lower rates. After all, they want these people as customers.”
House Bill 2513 is sponsored by Rep. Sharon Nelson of the 34th district. The Senate version, SB 6252, is sponsored by Sen. Jeanne Kohl-Welles of the 36th district.
Tomorrow’s hearing takes place at 6 p.m. in hearing room D of the John L. O’Brien Building in Olympia. To learn more about the industry’s use of credit scoring visit http://www.insurance.wa.gov/consumers/credit/index.shtml