General Motors is facing allegations from Texas Attorney General Ken Paxton that the automaker has been collecting data on its car owners‘ driving habits and selling that information to insurers without consumers‘ consent or knowledge. The lawsuit filed on Tuesday claims that GM has engaged in „false, deceptive and misleading“ business practices that have impacted 1.8 million Texans who own vehicles manufactured by the company.
This lawsuit comes at a time when new car systems are under increased scrutiny for their ability to track vehicles‘ speeds, locations, and even driver behavior such as braking habits. Mozilla has even gone as far as to call new cars a „privacy nightmare.“ Consumers who purchased GM vehicles were reportedly told that their driving data would be used to improve the safety and functionality of the vehicles, but they were not informed that this data would also be sold to insurers.
Texas Attorney General Ken Paxton stated in a Tuesday statement that „Millions of American drivers wanted to buy a car, not a comprehensive surveillance system that unlawfully records information about every drive they take and sells their data to any company willing to pay for it.“ This lawsuit is particularly significant as consumers are facing sharply higher insurance costs, with car coverage jumping 19% in July compared to a year earlier, due in part to riskier driver behavior.
In June, Paxton had initiated an investigation into several car makers over claims that they were improperly collecting data about drivers from their vehicles and selling it to other companies. GM responded to the lawsuit by stating that they are reviewing the complaint and share the desire to protect consumers‘ privacy.
The data collected by GM was allegedly sold to companies such as LexisNexis Risk Solutions and Verisk Analytics, allowing them to create driving scores for individuals based on factors like late-night trips, sharp turns, and hard braking. This telematics data can then be used by insurers to set auto coverage rates, with the promise that good driving habits will be rewarded with lower rates.
However, a New York Times investigation revealed that some drivers were unaware that their data was being tracked and used in this manner. One driver expressed feeling betrayed when he discovered that LexisNexis had compiled 130 pages about his driving habits, leading to a significant increase in his car insurance rates.
The Texas lawsuit alleges that GM „profited handsomely“ by selling driver data to insurance companies without informing car owners that their information could be sold to other businesses. The lawsuit claims that GM did not disclose to customers that their driving data was being sold or that their driving scores were being made available to other companies.
Overall, the lawsuit against General Motors highlights the importance of transparency and consumer consent when it comes to the collection and sale of driving data. Consumers should be aware of how their data is being used and have the right to make informed decisions about who has access to their personal information.