Photo by Global Panorama
General Motors has cut ties with two data brokers after a lawsuit alleged the company shared driver data leading to increased insurance premiums for the plaintiff. The suit, filed by Romeo Chicco in Florida, accuses GM and its OnStar subsidiary, along with LexisNexis Risk Solutions, of infringing on privacy and consumer protection laws. Chicco claims they distributed his driving data, including details on his speed, braking, and acceleration, to insurance firms. The case, seeking to become a class action, was lodged in the U.S. District Court Southern District of Florida.
Chicco alleges his privacy was invaded through the unauthorized gathering and distribution of negative driving information, which he was unaware of and did not consent to. The action reportedly caused Chicco significant emotional distress.
David Vladeck, a law professor and former director of the FTC’s Bureau of Consumer Protection, commented that the sharing of data without consent is a serious issue and anticipates more cases like this to arise, highlighting the breach of confidentiality and its financial implications.
General Motors (GM) has stated that it only shares customer data collected from the OnStar Smart Driver program with insurers after obtaining consent three times. The program, which is voluntary and can be opted out of anytime, aims to enhance driving safety and reduce vehicle wear-and-tear. Although GM’s spokesperson Kevin Kelly declined to comment on a the lawsuit, he stated that as of March 20th, OnStar Smart Driver no longer shares customer data with data brokers LexisNexis or Verisk, emphasizing the importance GM places on customer trust. Kelly did not disclose the duration of GM’s partnership with these companies or the reasons for terminating the relationship.
Chicco’s lawsuit alleges he did not sign up for OnStar services and did not give permission for his driving data to be distributed. Chicco was denied insurance by Liberty Mutual due to information in his LexisNexis report, which included his Cadillac’s driving data, such as acceleration, braking, and speed events. The report lacked context for these events. He discovered that the data was collected via OnStar’s Smart Driver program, though he claims he never enrolled in the program nor consented to data sharing.
Total revenue generated by GM from selling data is not specified in financial reports and is likely a minor portion of its overall earnings. Negative publicity and legal issues will likely outweigh the financial gains from data sales. However, as “electric “connected” vehicles become more common, opportunities for monetizing car data, like sharing GPS locations with retailers, will increase.
Kenn Dahl, a 65-year-old businessman from the Seattle area, experienced a 21% hike in his car insurance rates in 2022. This increase was attributed to data gathered by GM’s OnStar Smart Driver system in his Chevy Bolt, which was analyzed by LexisNexis. Over six months, the analysis tracked Dahl’s driving behaviors and compiled a 258-page report. This report documented trip durations, distances, and driving events such as speeding, hard braking, and sharp accelerations. For example, it noted details from a specific 18-minute, 7.33-mile trip, during which Dahl was reported to have rapidly accelerated twice and braked hard twice.
The LexisNexis report states it obtained data from GM’s OnStar Smart Driver service, which tracks various driving behaviors. OnStar’s advertised goal is to help drivers improve their skills and safety, offering a platform to track performance, complete challenges, and earn rewards. However, the sharing of this data with LexisNexis has led to customer complaints, with individuals like Dahl feeling that their private information has been misused to affect their insurance rates adversely.
Stung by Kia has gone through Kia’s Privacy Policy to see what data they collect on owners. That article can be found here.