In a landmark consumer‑protection agreement, General Motors will pay $220 million to resolve claims that it covertly gathered drivers’ location and driving‑habit information and then sold those records to data brokers for use by insurance companies. The settlement was announced by Michigan Attorney General Dana Nessel, who joined a bipartisan coalition of 36 state attorneys general in reaching the deal.
Key terms of the settlement
Under the agreement, Michigan will receive about $7.2 million. The settlement does not provide direct refunds or restitution to individual drivers, and a separate nationwide class‑action lawsuit seeking cash damages remains pending in federal court.
State investigators determined that from 2016 through 2024, GM enrolled millions of motorists in its “Smart Driver” feature. The company marketed the program as an educational tool to help customers drive more safely, assuring them that their data would never be shared with insurance carriers without explicit permission.
Instead, GM sold the detailed records to data‑brokering firms under contracts that earmarked the information specifically for insurance purposes. Those brokers then passed the driver profiles on to insurers, which used the metrics to assess risk and adjust premium rates.
What data was shared
The shared records included trip frequency, start and end times, instances of hard braking, rapid acceleration, and speeding. Insurance carriers allegedly used these metrics to raise premiums for affected motorists.
How the program operated without driver knowledge
Many drivers were enrolled in the monitoring service without their knowledge when purchasing vehicles at GM dealerships. Dealership staff, motivated by sales incentives, sometimes accepted terms and service agreements on behalf of buyers without informing them.
Technical glitches also concealed the tracking. The OnStar mobile app incorrectly indicated to more than 370,000 drivers that they were not enrolled in Smart Driver, even as GM continued to collect and sell their trip logs. When GM discovered the software error, it quietly removed those drivers from the enrollment list without notifying them, leaving the previously collected logs with outside brokers and insurers.
Response from officials and GM
“Drivers deserve to know what information about them is being collected and how it may affect their wallets,” Attorney General Nessel said. “Discovering after the fact that a company has been tracking and selling their driving data without consent is unacceptable. This settlement will hold GM accountable and secure meaningful safeguards so drivers have greater control over their information in the future.”
GM issued a statement noting that the agreement addresses the discontinued Smart Driver product and reinforces steps the automaker has taken to strengthen privacy practices. “Safer, more helpful and personalized experiences are enabled by connected vehicle data, and GM is committed to being clear about what information is used, how it is protected, and the choices customers have about what they share,” the spokesperson said.
Future privacy requirements
The settlement bars GM from collecting or sharing driving or location information without first obtaining clear, affirmative consent from motorists. The automaker must also implement a broader privacy program, conduct routine internal and external data assessments, cap the amount of driving data it retains, and require dealership training to prevent unauthorized enrollments.
The coalition of attorneys general includes representatives from Alabama, Alaska, Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Hawaii, Idaho, Illinois, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Utah, Vermont, Virginia, Washington, and Wisconsin.
This settlement represents a significant step toward protecting consumer privacy in an increasingly connected automotive market, and it underscores the role of state attorneys general in holding large corporations accountable for data‑handling practices.
Original reporting: Tampa Free Press — read the source article.
