On September 26 the U.S. Supreme Court agreed to decide whether insurance companies are required to inform consumers that they have to pay higher rates for coverage because of their low credit scores.  In class-action lawsuits insurance companies have been charged with violating the Fair Credit Reporting Act by failing to let consumers know that their low credit scores resulted in higher quotes for coverage.  The nation’s high court agreed to hear an appeal filed by Safeco Insurance Co., a unit of Safeco Corp.; Geico General Insurance Co., a unit of Berkshire Hathaway Inc.; and other insurers challenging a decision by the Ninth Circuit Court of Appeals in San Francisco.  The appellate court upheld a lower court’s ruling that companies must tell consumers when credit scores result in higher rates.  The lower court also said that companies could be liable for violating federal credit laws even if they were not found to have knowingly failed to comply.  Companies could be required to pay up to $1,000 in actual damages as well as punitive damages.

October 3, 2006