Breaking News: Hyundai, Honda, GM Accused of Selling Customer Data – 1.7 Million Vehicles Affected in $1 Million+ Settlement

Two US senators are urging the Federal Trade Commission to investigate car manufacturers who sell customer data to brokers, who then sell it to insurance companies. In a letter to FTC Chair Linda Khan, Democrats Ron Wyden of Oregon and Edward Markey of Massachusetts accuse General Motors, Hyundai, Honda, and others of sharing driver data and using deceptive tactics to manipulate customers into consenting to data disclosure.

An investigation by Wyden’s office into the three automakers mentioned in a New York Times report revealed that they had shared data with the broker Verisk Analytics. The senators wrote to Khan that all three automakers confirmed the data disclosure. GM publicly admitted to sharing customer location data with two unnamed companies.

Verisk then used the data to create driving behavior histories and sold them to insurance companies. Some automakers may have deceived customers by advertising data disclosure as a way to lower insurance bills.

“If the FTC determines that these companies have violated the law, they and their senior executives should be held accountable,” the senators wrote to Khan.

According to the letter, GM did not disclose how much data it sent to the broker. Wyden’s office found that Hyundai shared data from 1.7 million vehicles and was paid over $1 million, while Honda received less than $26,000 for data from 97,000 vehicles.

In an email, GM denied deceiving customers into enrolling in the data-sharing program with Verisk. The data-sharing partnerships with Verisk and LexisNexis were terminated in March, and the “Smart Driver” data-sharing program ended in June.

GM stated that data was only shared with insurance companies if customers initiated a quote directly with their chosen insurer and that only “anonymized” data was shared with partners to support city infrastructure and safer roads.

Hyundai, in a statement, said the senators’ letter misrepresented the company’s data policy and that it had safeguards in place to ensure customers agreed to share driving information with insurers. Customers also had the option to connect their driving scores with their insurer through Verisk for discounts.

Hyundai emphasized that “it is important to note that Verisk was not authorized by Hyundai or the customer to share data with insurers until the customer explicitly consented on the insurer’s website or app.”

Honda also stated that customers had to opt into the program with Verisk and that some customers with good driving scores received discounts from insurers.

Verisk disagreed with Wyden and Markey, stating that they “act to ensure data is accessed and used appropriately” and that responsible data usage “is the foundation of our business.”

Source: Forbes