US car giant General Motors (GM) is being sued by the state of Texas, which is accusing the company of collecting and selling driving data from its owners to insurance companies without consent.
Reuters reports GM had installed OnStar in more than 14 million vehicles to collect data about drivers, which was then sold to insurers and other companies without drivers’ consent to influence insurance premiums.
The lawsuit follows a potential class action case on the same issue from March this year, which was sparked by a Chevrolet Bolt owner being quoted a significantly higher insurance renewal premium due to the results of his LexisNexis driving report.
LexisNexis is a global data broker and has a Risk Solutions division that serves the insurance industry, with allegations arising that alleged GM had been sending data to the broker via the car’s onboard OnStar connected services system since 2015.
Texas Attorney General Ken Paxton reportedly said the most recent lawsuit arose from a probe announced in June, which was launched to investigate whether several automakers – including GM – collected and sold mass amounts of data without drivers’ knowledge.
He claims GM’s data was used to compile “Driving Scores” which assessed whether more than 1.8 million drivers in Texas had “bad” driving habits.
These included speeding, braking too fast, steering too sharply into turns, not wearing seatbelts, and driving late at night.
Insurers could then reportedly use the data collected by OnStar when deciding whether to raise premiums, cancel policies, or deny coverage.
Mr Paxton reportedly claims GM dealers would trick customers, who had just completed the “stressful buying and leasing process”, into believing that enrolling in the company’s OnStar system was mandatory.
“Companies are using invasive technology to violate the rights of our citizens in unthinkable ways,” Mr Paxton said in a statement, reported by Reuters.
“Our investigation revealed that General Motors has engaged in egregious business practices that violated Texans’ privacy and broke the law. We will hold them accountable.”
The claim that GM customers signed up to OnStar unwittingly is consistent with the case of Cadillac XT6 owner Romeo Chicco, who claimed he was denied insurance by seven companies earlier this year.
Mr Chicco had subsequently filed a federal complaint seeking a class action lawsuit against the auto giant in a Southern District of Florida court, alleging GM sent data to LexisNexis via OnStar.
According to OnStar, Mr Chicco voluntarily signed up for its Smart Driver program to receive driver feedback, though he denied any knowledge of how he enrolled in the system.
Reuters quotes a statement emailed by GM, which states the company has “been in discussions with the Attorney General’s office and are reviewing the complaint”, while it shares “the desire to protect consumers’ privacy”.
Texas filed its lawsuit in a state court in Montgomery County, near Houston, and is seeking the destruction of improperly collected data, compensation for owners, civil fines, and other action for violations of the Texas Deceptive Practices Act.
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