Arkansas Attorney General Tim Griffin sued General Motors and its subsidiary OnStar this week, alleging the car manufacturer deceived Arkansans by collecting and selling driver information to third parties, who then sold the data to insurance companies.
The lawsuit alleges GM collected location data on all drivers who activated the internet connection for their GM vehicles, even if the drivers did not enroll or opt-in to OnStar services. Griffin accuses GM of violating the Arkansas Deceptive Trade Practices Act. The lawsuit seeks monetary relief, injunctive relief, and attorneys’ fees and expenses.
“This case is about General Motors and OnStar improperly collecting detailed driving data and selling that data to third parties,” Griffin said. “These third parties then sold the data to insurance companies, who used that data to deny consumers coverage or increase their rates.”
GM captured Arkansans’ driving data using GM vehicles’ telematics systems, and the mobile apps that GM provides to customers such as myChevrolet, myCadillac, myGMC and myBuick. Unlike usage-based insurance programs that required an optional device installed by the customer that used driving data to reward good driving behavior, GM used the telematics system to unilaterally collect its customers’ driving data, analyze it, and sell it in a manner that, unknown to the driver, penalized bad driving behavior, the lawsuit states.
GM began selling driver data in 2015, and over the course of nearly a decade, the car manufacturer continued to sell, re-sell, and have other companies license out access to its customers’ driving data, Arkansas alleges.
GM entered into an agreement with data broker Verisk Analytics in 2015 to sell customers’ driving data. The lawsuit alleges that GM told Verisk it collected and sold driving data without customers’ consent.
Verisk established a telematics data exchange to house the driver data received from GM, then used that data to create a driving score calculated on factors including speed, acceleration, breaking and driver behavior, Arkansas says.
Upon purchasing the rights to access the data exchange, insurance companies could use it to search for the driving score of their insureds or potential insureds.
Arkansas alleges the information was used to financially harm GM’s customers, including by denying prospective insureds coverage, increasing insureds’ monthly payments or dropping their current insureds from coverage entirely.
“Despite advertising OnStar as offering the benefits of better driving, safety, and operability of its vehicles, GM and OnStar used the data to pad their profits at the expense of consumers,” Griffin said.
GM and other auto manufacturers have come under scrutiny in recent years for driver data sharing practices. At least two U.S. senators have urged the FTC to investigate how automakers sell customers’ data to brokers who sell it to insurance companies.
GM announced last year it would end its OnStar Smarter Driver program after GM vehicle owners complained they didn’t know they had consented to the program or that the selling of their personal driving data led their insurance rates to go up.
In January GM reached a settlement with the FTC over claims it deceived drivers by collecting their personal data and sharing it with third parties.
Topics
Lawsuits
Carriers
Data Driven
Personal Auto
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