As reported by the Detroit Free Press, General Motors (GM) has ended its arrangement with two data brokers, LexisNexis Risk Solutions and Verisk. The split follows news of a lawsuit that connected GM to sharing driver data that resulted in higher auto insurance rates for the plaintiff.
Romeo Chicco of Florida claimed that GM, its connected-services subsidiary OnStar and data analytics company LexisNexis Risk Solutions violated privacy and consumer protecton laws.
In the lawsuit, Chicco alleges that GM captured and shared his driving data- which included information about his speeding, braking, and acceleration- with LexisNexis, which then shared it with insurers. The complaint, filed in the U.S. District Court Southern District of Florida, seeks class-action status.
The parties are accused of gathering, "erroneous reports of derogatory and negative driving information made without Plaintiff's knowing consent. Additionally, this illegal transfer and publication of data constitutes an invasion of privacy" and the defendants' collective action caused Chicco "significant emotional distress."
"Sharing data without consent is bad," said David Vladeck, former director of the Federal Trade Commission's Bureau of Consumer Protection during President Barack Obama's first term and a law professor at Georgetown University. "There will be cases coming down the pike. This is a serious breach by the car companies. It's a breach of confidentiality and there are financial consequences."
GM said it shares limited data with insurers through a third party, which is collected through the OnStar Smart Driver program, after a custoer constents to it three times. That OnStar program is optional for drivers. The program monitors driving habits to help reduce wear-and-tear on the car and improve driving safety and customers can unenroll at any time.
Kevin Kelly, GM spokesperson, sent the Detroit Free Press the following statement: "As of March 20th, OnStar Smart Driver customer data is no longer being shared with LexisNexis or Verisk. Customer trust is a priority for us, and we are actively evaluating our privacy processes and policies."
Erik Gordon, a professor at the Ross School of Business at the University of Michigan and a lawyer, believes that if this lawsuit were to proceed to trial and the plaintiff wins, "there will be a rash of lawsuits" against automakers and others.
In the lawsuit, Chicco says he received an email offering him a Cadillac Connected Services trial and OnStar Safety and Security Coverage, days after downloading the MyCadillac App to his phone. It instructed him to hit the blue OnStar button to activate the services, which he never did because he said he didn't want them.
According to the lawsuit, the email did not mention OnStar's Smart Driver program. The program, according to OnStar's website, says that there is no charge for customers to enroll.
It states: "With customer consent, we share select OnStar Smart Driver insights about driving behavior with LexisNexis and Verisk, third-party telematics exchange companies that work with some insurance carriers [and] insights about driving behavior are only shared with an insurance carrier with your explicit consent."
The lawsuit contends that Chicco never enrolled in any OnStar services and he never consented for his driving data to be shared.
Yet in December 2023, he called Liberty Mutual to ask why he was rejected for insurnace. An agent said it was because of information in Chicco's LexisNexis report. Chicco got a copy of his LexisNexis report and it contained details of around 258 trips he had taken in his car over a few months. It included acceleration events, hard brake events, and high speed events, the law suit stated. Absent from these reports are context for any of the driving events.
After calling GM and LexisNexis to find out why his data had been collected and shared without his consent, he was told that it was because he had enrolled in OnStar's Smart Driver program. Chicco says he never enrolled in the program, nor consented to sharing his driving data.
With the increase of electric vehicles on the road, the connectivity of cars will increase and offer more opportunities for automakers to add revenue through data sharing, said Gordon. For example, selling a driver's GPS location to retailers who can then ping a driver a driver to stop at their store. The key will be to get drivers' clear and informed consent.
In December 2023, the Alliance for Automotive Innovation issued a statement titled, "No, your car isn't spying... it's keeping you safe." It said carmakers collect telematic driving data mostly to support the proper functions of the vehicle, including onboard computers for safety.
The alliance's memo didn't address the sale of data, only that automakers are complying with privacy principles that are enforceable by the FTC.
"Yes, some of these policies might be a little confusing, accounting for incidental collection and inferences drawn from, for example, where the vehicle may have traveled," the alliance's memo stated. "Blame the lawyers, but that's to ensure manufacturer compliance with notice obligations in the growing patchwork of state privacy laws on health information, biometrics, and others."
Content from Detroit Free Press.
