Allianz, Jefferson, BCS Insurance Cos. Charge Undisclosed Fees for ‘Sham’ Info Assistance Service, Class Action Claims [UPDATE]

New to ClassAction.org? Read our Newswire Disclaimer

Allianz Global Assistance, Jefferson Insurance Company and BCS Insurance Company face a proposed class action over what two consumers allege is the companies’ longstanding practice of charging hidden fees to online travel and event insurance buyers.

Though the defendants purport to present a straightforward offer to consumers looking to purchase travel or event insurance on major websites, the companies “secretly and unfairly” charge additional, undisclosed fees—costs that essentially provide only access to a toll-free customer service phone line—on top of the calculated premium, the 37-page complaint out of California federal court alleges. 

Per the suit, Allianz, Jefferson and BCS attempt to justify the allegedly hidden fees in places “other than the checkout screens where the transactions occur” by claiming the charges are for “assistance service,” which purportedly allows customers to spend time on the phone with defendant AGA Service Company’s customer service reps to request travel, weather and location information. 

In truth, however, consumers are “unaware of any such service and they do not want it,” the lawsuit contests, relaying customers also “certainly do not want to pay what Defendants charge for it.” Under California law, appointed agents such as AGA Service Company are not authorized to collect a fee for services “constituting or arising out of the transaction of insurance,” the suit says. 

“In the end, the assistance service is a sham and a pretext to collect illegal fees at the expense of millions of consumers,” according to the lawsuit, which seeks a judgment prohibiting the defendants from charging mandatory and/or undisclosed fees and requiring the companies to “plainly and truthfully” disclose all premiums, fees and charges prior to checkout. 

According to the lawsuit, California’s Insurance Code requires insurers and their agents to obtain approval for rates prior to offering those policies and rates to consumers, and to clearly identify the approved insurance premium. Moreover, there exist strict requirements for insurance producers who wish to charge a fee for certain services, the case says, relaying that a reasonable consumer expects an insurer and their agents to follow all laws and regulations, including clearly identifying premiums prior to purchase.

“Reasonable consumers who are quoted a single price for insurance reasonably assume that price is a lawful and approved premium and not a vehicle for hidden fees added to the insurance premium,” the complaint relays. 

The lawsuit says those who buy event tickets, such as from Ticketmaster.com, are presented with an insurance offer during the checkout process. The defendants, who the suit describes as the dominant event ticket insurance providers in the country, offer essentially the only available option for consumers looking to protect their event ticket purchases, per the case. 

Whereas a consumer would be quoted, say, $9 for event ticket insurance, they are unaware the charge consists of $7.53 for insurance and $1.47 for assistance, an essentially toll-free phone line to reach a customer service rep, the complaint says. According to the suit, the defendants’ ticket insurance offer makes no mention of any agent fee or charge for a non-insurance assistance service, with customers typically having no idea they’ve essentially just paid AGA for access to a customer service phone line. 

As the complaint tells it, if AGA were truly attempting to sell an informational assistance service, the company “would likely offer it for free (using advertisements to cover costs) or it would charge a flat, low fee and highlight some competitive edge over the alternative free sources of information available.” In reality, the defendants go out of their way to obscure what consumers have actually paid for when buying trip or event insurance policies, the lawsuit alleges: 

“Instead, AGA hides its agency fee and the assistance service from consumers at the point of purchase, uses a formula that increases the fee according to the purchase and risk at issue, and does not actually invest in providing a convenient informational assistance service. To minimize attention to the additional fees it charges, AGA sends contradictory messages to two different audiences: (a) suggesting to consumers (during the solicitation) that there is just a single insurance premium (to keep them ignorant of the additional charge), while (b) suggesting to regulators that the fee for assistance services is distinct from the insurance premium (to present a lower premium figure and to try to avoid further scrutiny of the ‘non-insurance’ fee).”

The lawsuit looks to represent those who bought event ticket and/or trip, travel or flight insurance policies from Allianz, Jefferson Insurance Company and BCS Insurance company while residing in California at any point between September 4, 2016 and the present, excluding those who actually used AGA’s “assistance services.”

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.