Arkansas sues GM over data collection and sharing practices

Arkansas on Wednesday sued General Motors and its OnStar subsidiary for deceptive trade practices, alleging the auto giant collected and sold consumer driving data to brokers who fed it to insurers.

The data collection and sales, which occurred over the course of a decade, were used to raise consumers’ insurance rates and sometimes led to them being kicked off plans, the complaint says.

Attorney General Tim Griffin alleged that GM’s sale of vehicle speed, acceleration, braking, late night driving patterns and other information without informed consent was “unconscionable.”

Location data belonging to drivers who activated their vehicle’s internet connection was collected and sold even when drivers did not enroll or opt in to its OnStar telematics system, the complaint says.

Arkansas is seeking an injunction to stop GM’s data practices and substantial civil penalties, including requiring GM to pay back the money it earned from selling data belonging to state residents.

Bloomberg Law was first to report the lawsuit.

The complaint says more than 100,000 Arkansas residents were victims of the “secret scheme,” which the complaint calls all the more “egregious” since GM and the insurers it sold to had no way of knowing if the owner of the vehicle, a friend or valet was behind the wheel when bad driving occurred.

Last August, Texas Attorney General Ken Paxton also sued GM for deceptive trade practices relating to its collection and sale of driver data.

Calling GM’s OnStar system an “Orwellian Big Brother,” the Arkansas complaint alleges that the automaker gave dealership salespeople financial incentives for signing consumers up for OnStar.

Meanwhile, the car company took money out of their commissions if they did not include a customer-signed copy of the OnStar Terms and Conditions in sales materials. Salespeople routinely created OnStar accounts for customers before telling them about its connected vehicle plan, the complaint alleges.

A spokesperson for GM did not respond to a request for comment.

GM also used “deceptive onboarding” when enrolling customers for OnStar and deliberately excluded disclosures about the data sales from its privacy policy, which cited internal research and prevention of security incidents as examples of why it collected driver behavior data. The policy said nothing about sales to data brokers and insurers, the complaint says.

Quoting GM’s marketing materials, the complaint says the company misrepresented the purpose of OnStar by excluding data sales from its aspirational slogans.

GM couched its collection of data as a means of realizing its “vision of a world with zero crashes, zero emissions and zero congestion” while boasting about “critical safety services” and “convenience features” presented by its connected vehicle services, the complaint said.

The automaker sold the data knowing that it would “financially harm its customers,” according to the complaint.