The Massachusetts Division of Insurance (DOI) fined Progressive $125,000 for misleading customers about the methods by which they set auto insurance rates.
According to the DOI, Progressive communicated to roughly 3,200 Massachusetts consumers that their credit information was used to calculate their auto insurance rates contrary to state regulations, which prohibit insurers from using credit information to set rates.
The company said it doesn’t actually use credit information to calculate rates in Massachusetts. It simply mistakenly referred some consumers looking for quotes to a standard explanation on its web site of how it uses credit histories in other states.
Progressive said it eliminated the link last month and is reaching out to customers who clicked on the link to apologize for the misunderstanding.
This isn’t the first time Progressive has been fined by the Massachusetts DOI since embarking on insurance sales in the state. In 2008, their web site accidentally compared their 6-month rates to annual rates for its competitors, making their rates seem like a steal. Also, in 2009, they overcharged some customers. Progressive was fined a total of $120,000 for the 2008 and 2009 incidents, and paid an additional $30,000 for neglecting to process some refunds.