The largest US auto manufacturer, General Motors (GM), is being sued by the state of Texas over allegations that the company collected and sold owners’ driving data to insurance companies without consent.
Reuters GM reportedly installed OnStar in more than 14 million vehicles to collect data about drivers, which it then sold to insurance companies and other companies without drivers’ consent to influence insurance premiums.
The lawsuit follows a potential class action lawsuit on the same issue In March this year, the incident began when a Chevrolet Bolt owner was quoted a significantly higher insurance renewal premium due to the results of his LexisNexis driving report.
LexisNexis, a global data broker and Risk Solutions division serving the insurance industry, alleges that GM has been sending data to the broker through its OnStar connected vehicle services system since 2015.
Texas Attorney General Ken Paxton is reported to have said that the latest lawsuit arose from an investigation announced in June, which aimed to investigate whether some automakers — including GM — were collecting and selling large amounts of data without drivers’ permission.
He claimed GM data was used to compile a “Driver Score” that assessed whether more than 1.8 million drivers in Texas had “bad” driving habits.
These behaviors include speeding, braking too quickly, steering too sharply when cornering, not wearing a seat belt, and driving late at night.
Insurance companies can then use the data collected by OnStar when deciding whether to raise premiums, cancel policies, or deny coverage, according to the report.
Mr. Paxton reportedly claimed that GM dealers would trick customers who had just completed a “stressful car buying and leasing process” into thinking that signing up for the company’s OnStar system was mandatory.
“Companies are using invasive technology to violate our citizens’ rights in unimaginable ways,” Paxton said in a statement, reported by Reuters.
“Our investigation found that General Motors engaged in egregious business practices that violated the privacy rights of Texans and violated the law. We will hold them accountable.”
The claim that GM customers were accidentally signed up for OnStar fits the case of Cadillac XT6 owner Romeo Chicco, who claims he was denied insurance by seven companies earlier this year.
Mr. Chicco then filed a federal class-action complaint against the auto giant in the Southern District of Florida, alleging that GM sent the data to LexisNexis through OnStar.
According to OnStar, Mr. Chicco voluntarily signed up for the Smart Driver program to receive feedback from drivers, although he denied knowing how to sign up for the system.
Reuters cited an emailed statement from GM, which said the company had “been in discussions with the Attorney General’s office and is reviewing the complaint,” and shared “a desire to protect consumer privacy.”
Texas filed the lawsuit in state court in Montgomery County, near Houston, seeking the destruction of improperly collected data, restitution to the owners, civil penalties and other actions for violating the Texas Deceptive Practices Act.
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