December 22, 2011 in Business

Geico refunds gap in promised savings, services

By The Spokesman-Review
 

OLYMPIA – The Geico gecko might not be so chipper about promises that a few minutes will save customers a certain amount of money.

The insurance giant is refunding some $7.5 million to Washington state customers and paying a $100,000 fine because a promotion didn’t deliver the promised savings.

Washington Insurance Commissioner Mike Kreidler said Geico had a problem matching a pair of databases for customers responding to an offer for savings on premiums for drivers with good records. The databases didn’t merge correctly, so the savings never showed up for more than 25,000 customers.

Geico, which is one of the state’s largest carriers, caught the problem itself and self-reported to the Insurance Commission, Kreidler said. It is contacting current and former customers who were supposed to get the discount between August 2009 and June 2011, and sending the check for the promised amount plus 8 percent interest.

The refunds average about $300, and should be sent to customers by the end of the year.

“They moved responsibly on this,” Kreidler said. Because of that, the commission suspended $50,000 of the fine on the condition the computer problem is fixed and doesn’t recur.


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