Texas Attorney General Ken Paxton sued General Motors for allegedly illegally collecting and selling drivers’ data to insurance companies without their consent or knowledge. This is the first lawsuit against a car manufacturer as part of an investigation opened in June for collecting and selling data without proper authorization. With a lack of detailed federal data privacy laws, states are taking action to protect consumers in the data brokerage market.
General Motors is accused of using technology in car models from 2015 and later to collect and transmit detailed driving data about each time a driver used their vehicle. This data was then sold to various companies, including two companies that created “Driving Scores” about GM’s customers and sold them to insurance companies. This information allows insurance companies to assess driver behavior, potentially leading to lower rates for safer drivers who voluntarily opt-in to such programs.
The attorney general’s office claimed that GM deceived its Texas customers by encouraging them to enroll in programs like OnStar Smart Driver without fully disclosing the collection and sale of their data. Despite lengthy disclosures, customers were not informed about the systematic collection and sale of their driving data. The AG’s office is seeking justice for customers who unknowingly agreed to have their data collected and sold without their awareness.
Insurance companies rely on data to assess driver behavior and offer lower rates to safer drivers. While some companies offer voluntary opt-in programs for customers, GM allegedly did not fully inform its customers about the extent of data collection and sale. The AG’s office is holding GM accountable for its actions and seeking justice for customers who were misled into agreeing to have their data shared without their knowledge.
GM’s actions raise concerns about data privacy and consumer protection in the growing data brokerage market. With states taking initiative to pass regulations to protect consumers, companies like GM may face legal repercussions for not adequately informing customers about data collection practices. This lawsuit against GM sets a precedent for holding car manufacturers accountable for unauthorized data collection and sale to third parties without customer consent.
The outcome of the lawsuit against GM will likely impact how car manufacturers handle data collection and disclosure practices in the future. As more states implement data privacy laws to protect consumers, companies will need to be transparent about their data collection practices and ensure that customers are fully informed before collecting and selling their data. This case highlights the importance of data privacy and consumer protection in the ever-evolving digital landscape.
