On January 16, US General Motors and its ally OnStar agreed not to share sensitive vehicle geolocation and driver behavior data with consumer reporting agencies for five years. The US Federal Trade Commission reported the agreement on Thursday. The agency blamed one of the largest US automakers for collecting, using, and selling accurate geolocation and behavior data of drivers. They produced data for millions of vehicles, which can be easily used to set insurance rates without informing consumers and obtaining consent.
The vehicles automatically collected data, including hard braking, late-night driving, and speeding. These data were shared with consumer reporting agencies without drivers’ consent. The agencies used the data to analyze reports that insurance companies used to deny insurance and, in some cases, raise rates.
GM Banned from Selling Driver Data
FTC claimed in a press release that GM was tracking precise geolocation and driving behavior data of around 9 million people, for sale. GM used the technology to sell sensitive data, causing people to lose their car insurance, see sudden premium hikes, and reveal exact locations they visited, like places of worship and doctor’s offices.
The FTC claims GM linked precise location data to each car’s VIN, allowing them to track trips and build a detailed profile of drivers’ habits. This data was sold to a connected car company and a consulting firm, and at one point, GM even shared information about the radio stations drivers listened to.
What GM Said About the Issue?
GM said that the program was designed to promote safe driving by promoting drivers’ feedback and analyzing their driving behavior on the road. It also mentioned the plan to end the Smart Driver program by last year only. The company said, “We’re more committed than ever to making our policies and controls clear and accessible as we continue to evolve the driving experience for our customers.”
As part of the FTC settlement, the company must get driver consent to collect data and let them delete or limit it. This case is one of several the Democrat-led FTC is pushing before President-elect Donald Trump’s inauguration on Monday. The two Republican commissioners at the FTC voted against the case.
Deceptive Tactics to Mislead Customers
In its complaint, the FTC claimed that GM, based in Detroit, used a deceptive sign-up process to get consumers to join OnStar and its Smart Driver feature, which GM promoted as a tool to help drivers track their habits.
The complaint says that consumers who tried to reject OnStar’s terms were told their decision would lead to the deactivation of all services, like Automatic Crash Response, Emergency Services, and Vehicle Diagnostics.
It also claims the choices about accepting or declining OnStar Smart Driver were confusing and misleading, with some consumers unknowingly signing up for the program.
