General Motors has been sued by the state of Texas for allegedly selling detailed driving records to insurance companies at a profit, the New York Times reported on Tuesday.
Using its OnStar telematics system, the suit alleges, GM gathered the data of 16 million drivers and sold it to car insurers, resulting in skyrocketing insurance premiums or dropped coverage for those customers.
The data included driving behaviors for individual users, start and end times of certain trips, as well as instances of speeding over 80 mph and hard braking events. Late-night driving and the use of seat belts, as well as instances of "sharp turns," were gathered and sold to outside vendors that then compiled a "Driving Score" to sell to insurers.
The Times reported that GM collected "millions of dollars" through multiple revenue streams that included upfront payments from insurers as well as ongoing royalties. In March, the paper reported that several car companies were selling driving data that was then used by LexisNexis to create these driver profiles. That and the Texas suit say it was all done without drivers' knowledge and the practice has been common since 2015.
The suit claims GM used misleading and deceptive acts to get customers to enroll in OnStar products, such as GM's mobile apps and connected vehicle services. The process was bundled as part of more than 50 pages of paperwork at the dealer to take ownership of the car, and it included "a confusing series of applicable user terms and privacy notices."
The disclosures were made to sound as if GM would be using the data to improve the safety and functionality of its cars. OnStar touts itself as a means of protection against theft, a roadside emergency assistance provider, an automatic crash response feature, and a system to alert emergency services in case of a crash.
"At no point did General Motors inform customers that its practice was to sell any of their data, much less their Driving Data," the suit asserts.
GM says it's reviewing the complaint. Texas is seeking a jury trial and for civil penalties to be imposed on GM, and that all collected data should be destroyed.
