General Motors sold data on drivers’ habits to insurers without their consent.

Modern vehicles with a constant connection to the global network have long provided the opportunity to collect statistics on the driving style of car owners, and insurance companies, with the consent of clients, use this data to reduce rates for disciplined drivers. The GM corporation traded such data without the consent of customers and ran into claims from regulators in the United States.

Image source: General Motors

According to The Verge, by decision of the US Federal Trade Commission (FTC), General Motors Corporation and its OnStar division are deprived of the right to sell data about users of branded services for a period of five years. Among OnStar subscribers, parent company General Motors collected data on vehicle performance and geographic location, which it then offered to third-party insurance brokers like LexisNexis and Verisk. The survey was sometimes conducted every three seconds, creating a fairly dynamic picture of the driver’s habits.

Some of GM’s customers ended up seeing their insurance rates rise as insurers were able to identify drivers at higher risk of being involved in an accident. The situation wasn’t very pretty: the car owner paid GM for access to the OnStar system, and the automaker ended up selling the driver’s data to third-party companies without the driver’s consent, ultimately increasing the driver’s costs. GM did not notify customers that it was collecting such information, and also did not warn about the transfer of accumulated data to third companies. Finally, no one asked car owners for permission to carry out such manipulations. The FTC investigation ultimately led to a five-year ban on GM selling customer data to third parties, and the automaker announced it would discontinue its OnStar Smart Driver customer program.

The commission also forced GM to continue to obtain permission from users to collect data about their movements and driving habits, as well as provide the ability to delete this information at the request of the customer.