Allstate Corp. will pay almost $12 million to settle a class action discrimination suit over its use of credit scoring and issue a new scoring formula under terms of an agreement reached last week and approved by a federal court in Texas.
U.S. District Court Judge Fred Biery, sitting in the Western District of Texas in San Antonio, approved a settlement in the case of DeHoyos vs. Allstate Corp. on Feb. 14.
The case, first filed in 2001, charged that Allstate's credit scoring formula discriminated against African-Americans and Hispanics, charging them higher rates than Caucasians. According to court documents, the case affects about 4.8 million policyholders.
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