DETROIT — Two U.S. senators are calling on the Federal Trade Commission to investigate automakers selling customers’ driving data to brokers who package it and then sell it to insurance companies.
In a letter to FTC Chairwoman Linda Khan, Democrats Ron Wyden of Oregon, and Edward Markey of Massachusetts allege that General Motors, Hyundai, Honda and perhaps others are sharing drivers’ data, such as sudden braking and acceleration.
The automakers, the senators said in a statement Friday, used deceptive tactics to manipulate customers into signing up for disclosure of the data to brokers.
After reading a report in The New York Times, Wyden’s office looked into the three automakers and found that they shared data with broker Verisk Analytics. In the letter to Khan, the senators wrote that all three automakers confirmed disclosure of the data. GM also confirmed that it disclosed customer location data to two other companies that the automaker would not name, the letter said.
Verisk used the data to prepare reports on driving-behavior history and sold them to insurance companies, the letter said. Some automakers may have deceived customers by advertising data disclosures as a way to reduce insurance bills, without telling them that some insurers could charge more, the senators wrote.
“If the FTC determines that these companies violated the law, we urge you to hold the companies and their senior executives accountable,” the senators wrote to Khan.
GM wouldn’t say how many cars’ data was sent to brokers or what it was paid, according to the letter. Wyden’s office found that Hyundai shared data from 1.7 million vehicles and was paid just over $1 million, while Honda got just under $26,000 for data from 97,000 vehicles, the senators said.
A message was left Friday after business hours seeking comment from the FTC.
In an email, GM denied that it deceived customers into enrolling in the data-sharing program with Verisk. Data-sharing partnerships with Verisk and LexisNexis were canceled in March, and its data-sharing program called “Smart Driver” ended in June, GM said.
“Data was only shared with an insurer if a customer initiated a quote directly with their chosen carrier and provided a separate consent to that carrier,” the email said.
The company said it does share “de-identified” data with partners to aid city infrastructure and make roads safer.
In a statement, Hyundai said the senators’ letter mischaracterizes its data policies and that it has safeguards to make sure customers agree to sharing driving information with insurers.
Customers, it said, had the option to connect driving scores to their insurers through Verisk for possible benefits such as good-driving discounts.
“It is important to note that Verisk was not authorized by Hyundai or the customer to share the Drive Score data with insurers until the customer affirmatively consented to this on an insurer’s website or app,” Hyundai said.
Honda also said that customers had to opt into the program with Verisk. Some customers with good driving scores were given the chance to agree to discount offers from insurers. “Without that clear second opt-in by the customer, no identifiable consumer information was shared with any insurance company,” Honda said.
Verisk also disagreed with Wyden and Markey and said in a statement that it “acts to ensure data is accessed and used appropriately.” The company said using data responsibly “is the cornerstone of our business.”
A group of senators is calling on the Federal Trade Commission (FTC) to investigate automakers’ practice of selling driving data to third-party brokers. The senators, led by Senator Richard Blumenthal of Connecticut, are concerned about the privacy implications of this practice and are urging the FTC to take action to protect consumers.
The issue at hand is the collection and sale of data generated by modern vehicles, which are equipped with a range of sensors and cameras that can track everything from a driver’s location and speed to their driving habits and preferences. This data is often collected by automakers and then sold to third-party brokers, who in turn sell it to advertisers, insurers, and other companies looking to target consumers based on their driving behavior.
While automakers argue that this data is anonymized and aggregated to protect consumers’ privacy, critics argue that it still poses a risk to individuals’ personal information. For example, even if data is stripped of personally identifiable information, it can still be used to track individuals’ movements and behaviors over time, potentially revealing sensitive information about their habits and routines.
In their letter to the FTC, the senators expressed concern that consumers may not be aware of the extent to which their driving data is being collected and shared, and called on the agency to investigate whether automakers are adequately protecting consumers’ privacy and providing them with clear information about how their data is being used.
The senators also raised concerns about the potential for this data to be used in ways that could harm consumers, such as by allowing insurers to adjust rates based on driving behavior or by enabling advertisers to target individuals based on their location and habits. They urged the FTC to consider whether additional regulations or guidelines are needed to ensure that consumers’ privacy is protected and that they have control over how their driving data is used.
The issue of data privacy in the automotive industry is likely to become increasingly important as vehicles become more connected and autonomous. As cars become more like smartphones on wheels, capable of collecting and transmitting vast amounts of data about their drivers and passengers, it will be crucial for regulators to ensure that consumers’ privacy rights are protected.
In the meantime, consumers should be aware of the potential risks associated with the collection and sale of driving data by automakers and take steps to protect their privacy. This may include reviewing their vehicle’s privacy settings, limiting the amount of data they share with automakers, and being cautious about sharing personal information with third-party brokers. By staying informed and vigilant, consumers can help ensure that their driving data remains private and secure.
