General Motors will pay $220 million to settle charges that it illegally sold consumers’ private driver behavior data and location information to third parties, including data brokers, who then sold the data to insurance companies. The data was used by insurers as a factor in setting insurance rates for many consumers.
The settlement, following a lawsuit filed by a coalition of 36 attorneys general, requires GM to get consent from consumers before collecting or disclosing consumer driving and location data.
“People bought a car, not a tracking device,” Oregon Attorney General Dan Rayfield said in a statement. “This settlement puts people back in control of their own information,”
From 2016 to 2024, GM enrolled millions of drivers in their Smart Driver program, which tracked their driving habits. The company pitched the tool as a way for drivers to improve their own driving safety and told drivers that they wouldn’t share their data with insurers without their consent, according to the lawsuit.
However, the attorneys general’s investigation found that GM sold this information to data brokers under contracts that specified the data was to be used for insurance products. The data brokers sold the data to insurance companies, who could then change the driver’s premium based on their driving habits. GM didn’t disclose to drivers that their data would be sold for this purpose, the coalition said.
Most customers who signed up for Smart Driver at the GM dealership when they bought their car. GM used one sign-up process for drivers to enroll in Smart Driver along with GM’s OnStar services. In many cases, dealership employees accepted terms and conditions on behalf of customers without their consent, according to the lawsuit.
At the time, GM was heavily incentivizing dealerships to sign up as many customers for OnStar as possible, the investigation found.. Sales employees received bonuses based partially on how many customers signed up for GM’s connected vehicle services and dealerships were ranked based on their enrollment numbers.
GM’s systems failed to notify drivers about whether their data was being tracked, according to the investigation. The OnStar app mistakenly told over 370,000 drivers that they weren’t enrolled in Smart Driver, when they actually were enrolled and GM was collecting and selling their data.
The investigation found that GM later quietly unenrolled these more than 370,000 drivers without telling them about the mistake and left their data with the data brokers and insurance companies.
The data GM sold was personal, identifiable, and specific, the coalition said. Insurers had data showing how many times a person drove their vehicle, the start and end times of each drive, how many times they braked or accelerated quickly, and whether they went faster than the speed limit.
Insurance companies then used this information to change rates, sometimes increasing their premiums, according to an article in The New York Times. After The Times reported on these practices, GM discontinued the Smart Driver program.
The settlement also requires GM to limit the driving data it collects from consumers and protect their personal information as part of a comprehensive data privacy program. GM also agreed to oversight and training requirements at their dealerships to protect consumers against being enrolled in data collection schemes without their consent.
Photo: TheWxResearcher
