SANTA MONICA (CBSLA.com) — A former Auto Club insurance agent is blowing the whistle on an alleged customer discrimination scheme.
Jill Rogers, who was employed by AAA of Southern California for 15 years, is seeking class-action status for a lawsuit accusing the insurer of giving financial incentives to agents who deny policies or insurance to uninsured drivers.
Rogers, who worked for three years as a sales agent, said the company rewarded agents who turned down uninsured customers.
“I wasn’t happy with the way they were doing business, so I chose to walk away,” she said.
An attorney with the Consumer Watchdog Group, who is representing Rogers, says it is illegal to discriminate against uninsured drivers seeking policies.
“It’s not legal,” attorney Harvey Rosenfield said. “The law says an insurance company can’t take into consideration the absence of prior auto insurance.”
During a news conference, Rogers demonstrated how the Auto Club used a score card to evaluate new customers. In one category, agents get zero points or just $20 when writing a policy for first-time drivers or an uninsured driver.
If the new applicant has insurance, the agent gets 35 points – which the lawsuit claims equals hundreds of dollars in commission.
“A lot of agents would hang up on customers because they didn’t want to take time for $20 policies when the next call could be a hundred dollar policy,” Rogers said.
In 2008, the Auto Club paid $22.5 million to thousands of policy holders for imposing surcharges of uninsured drivers. Now attorneys say the company found a new way to make money.
“Clearly punishing agents to discourage them to sell policies to people without prior insurance is a black letter violation of the law voters passed in 1988,” Rosenfield said.
The Auto Club said the lawsuit was inaccurate and without merit and released this statement:
“If the plaintiff can provide us with information as to who is providing poor service to uninsured applicants, we will certainly investigate these allegations.”
The class action lawsuit is asking for thousands of current and past insurance agents with the Auto Club to be reimbursed for lost commissions and seeks to stop what they call an illegal practice.