Report reveals how GM sold customer data, leading to soaring insurance premiums; is the automaker doing damage control?
In the wake of a lawsuit and bombshell investigation by the New York Times that revealed disturbing practices in which many automakers shared customer driving data with the insurance industry, resulting in higher premiums for certain drivers, General・Motors announced that it would terminate its insurance contract. his relationships with data brokers LexisNexis and Verisk;
The class action lawsuit was filed by Romeo Chicco of Florida on March 13th against GM, OnStar, and LexisNexis. According to Freep, Chicco said data about driving habits that GM provided through Cadillac (including details about speeding, braking, and acceleration) was shared with LexisNexis, which then passed it on to the insurance company, and as a result, They claim that their insurance payments have increased significantly. his insurance premium.
In response, the automaker said that customer trust is its top priority and that it is reviewing its policies.
Read more: Automakers may continue collecting data from cars even after privacy lawsuit is dismissed
“As of March 20, OnStar Smart Driver customer data is not being shared with LexisNexis or Verisk,” GM spokesman Kevin Kelly told the Detroit Free Press in a statement. Customer trust is a top priority for us and we actively evaluate our privacy processes and policies. ” This decision to prioritize customer trust and privacy may come a little too late.
On March 11, the New York Times published an article about a man who said he felt betrayed by GM. The manufacturer sent data about his driving to data broker LexisNexis, which created a risk report. That risk report caused Ken Dahl's premium to go up when he went shopping for insurance.
According to the NYT, Chico alleges that GM and OnStar violated privacy and consumer protection laws. It is clear that as a result of his communication of data, seven different insurance companies rejected him. He finally found a company that would cover his Cadillac, but the company would only cover it for almost twice what he was paying.
Freep reports that this may just be the first of many lawsuits surrounding this type of data processing. “There will continue to be cases. This is a serious violation by an auto company. This is a breach of confidentiality and it has economic implications,” said former director of the Federal Trade Commission's Bureau of Consumer Protection. David Vladeck says.
As Carscoops pointed out when it first reported this story, GM isn't the only automaker selling (or having sold) data. Honda, Acura, Kia, Hyundai, and Mitsubishi have done similar things, with varying degrees of privacy standards. In most cases, drivers do not seem to be aware that their data is being collected. Moreover, they almost certainly are not aware of how it is being used.