WORLDTECHGM settles with 36 states for selling driver data, agrees to $220 million fine and reforms
What happened
General Motors agreed to pay $220 million to settle a lawsuit filed by a coalition of 36 state attorneys general who alleged the company unlawfully sold information about driver behavior to outside parties. However, GM allegedly broke that promise by selling the information to data brokers despite contract language it signed indicating the brokers planned to profit by providing the data to insurers.
Pressure and deception Most customers agreed to participate in the Smart Driver program at dealerships as they were purchasing cars, and many have described pressure tactics that convinced them to sign. Dealership employees were allegedly given bonuses for successfully enrolling customers in Smart Driver and dealerships also received incentives with GM ranking them against each other based on enrollment numbers, the press release said.
The data brokers then sold the sensitive data to insurers, affecting the prices drivers were charged for insurance, according to a press release from Washington Attorney General Nick Brown, who co-led the coalition’s efforts. The company allegedly marketed the program to customers by emphasizing participation could help drivers bolster their driving safety.
The manufacturer also allegedly promised customers that it would not give insurers their data without their affirmative consent. GM did not tell participating customers they would do so, the suit alleged.
“Safer, more helpful and personalized experiences are enabled by connected vehicle data, and GM is committed to being clear about what information is used, how it’s protected, and the choices customers have about what they share,” they said. The one time sign-up process for drivers to enroll in Smart Driver also swept them into GM’s OnStar services. The data collection system operated with built-in factory surveillance far exceeding what insurers could collect by offering customers discounts to sign up for their own driving behavior trackers.