General Motors and OnStar have been banned from sharing consumers’ geolocation and driver behavior data with consumer reporting agencies for the next five years, following an investigation by the Federal Trade Commission (FTC). The FTC found that GM had been collecting data through its OnStar Smart Driver program, which monitored driving habits and location, sometimes as frequently as every three seconds. This information was then sold to third-party platforms, including telematics analysis firms such as Verisk and LexisNexis, without adequate consent from customers. These third-party companies then offered the driver data to insurance companies, who used it to raise premiums for drivers deemed to be 'high risk'.
The investigation revealed that many consumers were unaware that their data was being shared and sold, with some expressing concern that it directly impacted their insurance costs. GM has acknowledged these privacy concerns and has discontinued the Smart Driver program, as well as terminated its third-party telematics relationships with LexisNexis and Verisk. As part of the settlement with the FTC, GM must now take steps to improve transparency for its customers regarding data collection practices.