— A GM OnStar lawsuit settlement has been reached with the Federal Trade Commission after the agency accused General Motors and OnStar of selling data and driving behavior information to third parties, including consumer reporting agencies.
GM has long offered OnStar as a service that helps consumers during an emergency and provide hands-free voice assistance and real-time traffic and navigation.
However, GM and OnStar have also been collecting data which, according to the FTC, "include precise geolocation data—collected every three seconds for some users."
Every event of hard braking, speeding, locations of the vehicle and late night driving were sold to agencies which used the data to create credit reports on consumers. Those reports were allegedly used by insurance companies to set insurance rates or even completely deny insurance coverage.
The FTC says the GM OnStar lawsuit was filed because GM allegedly failed to "disclose to consumers the types of information it collected through its Smart Driver feature."
According to the GM OnStar lawsuit, the FTC alleges a new GM customer was advised to signup for OnStar and Smart Driver which would help the customer monitor their driving habits. But the government claims signing up was confusing and misleading to consumers.
GM customers complained their insurance rates were affected because they didn't know their data would be sold to third parties.
The proposed order settling the GM OnStar lawsuit says General Motors is banned for five years from sharing or selling geolocation and driving behavior data to consumer reporting agencies.
General Motors and OnStar must also "obtain affirmative express consent from consumers prior to collecting connected vehicle data" unless it is related to providing location data to emergency responders.