General Motors is embroiled in yet another legal battle concerning the gathering and sale of customer driving data, a practice that allegedly led to higher insurance premiums for buyers. The lawsuit, filed in the U.S. District Court for the Eastern District of Michigan, accuses GM of unauthorized data collection and sale, claiming that the company was aware of its lack of legal consent but continued the practice nonetheless.
Plaintiffs Larry Reed from Michigan and Darnell McCoy Sr. from California seek class-action status for the lawsuit. They argue that GM’s recent decision to cease data collection and sever ties with brokers like LexisNexis and Verisk indicates the company’s awareness of its legal predicament.
According to the complaint, GM and its subsidiary OnStar engaged in deceptive practices to gather vehicle data without owners’ consent. This data was then shared with brokers, who used it to assess driver behavior and adjust insurance rates accordingly. The lawsuit alleges that approximately 8 million vehicles were involved in GM’s data-sharing programs with LexisNexis and Verisk.
Furthermore, the lawsuit contends that customers were not provided with a genuine option to opt out of the OnStar program, particularly in vehicles where a three-year subscription was mandatory from the 2022 model year onwards. The plaintiffs seek damages exceeding $5 million from GM and OnStar, citing violations of privacy and consumer protection laws.
This is not the first legal challenge GM has faced regarding data collection. A previous lawsuit filed in the U.S. District Court Southern District of Florida accused both OnStar and LexisNexis of similar violations. While GM maintains that the sale of data is aimed at assisting businesses in risk management, the lawsuits raise concerns about privacy infringement and consumer rights.
The situation has further damaged GM’s reputation, highlighted by investigative reporting revealing instances where customer data was used without consent. While GM’s decision to halt data sales may mitigate some concerns, the legal ramifications are far from over. It remains to be seen how these lawsuits will unfold and impact GM’s standing with the public.