GM Facing Second Lawsuit Over Data Collection and Sales

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GM Facing Second Lawsuit Over Data CollectionMack Hogan


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General Motors is now facing a second lawsuit related to the collection of customer driving data, and the subsequent sale of that data to third party companies, which led to individual insurance rate hikes for the automaker’s buyers.

According to the Detroit Free Press, this new lawsuit was filed on March 28 in the Southern Division of the U.S. District Court for the Eastern District of Michigan, with Larry Reed of Michigan, and Darnell McCoy Sr. of California, listed as the initial plaintiffs in this case. The lawsuit, which is seeking class action status, alleges that GM’s March decision to halt data collection and cut ties with brokers such as LexisNexis and Verisk suggests that GM knew it didn’t have the legal consent required to continue the practice.

The complaint further alleges that GM and its subsidiary in OnStar used deceptive practices to invade the privacy of owners, ultimately collecting vehicle data and sharing it with brokers like LexisNexis and Verisk. This data was then used by insurance companies to justify insurance rate adjustments based on driver behaviors like speeding, as well as hard braking and acceleration incidents. The 246-page lawsuit states that some 8 million vehicles were included in GM’s programs with LexisNexis and Verisk. The suit also states that customers didn’t actually have a choice to opt out of the OnStar program, particularly in select 2022 MY and up products where a three-year subscription was mandatory. There are reportedly over 100 punitive class members available for a class action suit, with the plaintiffs seeking damages from GM and OnStar of more than $5 million.

Another lawsuit was filed against GM on March 13th in the U.S. District Court Southern District of Florida, which accused both OnStar and LexisNexis of violating consumer protection and privacy laws. GM maintains that the sale of that data was meant to help its fellow businesses “manage risk.”

That's the same day that the New York Times dropped its landmark piece of reporting documenting exactly how GM's data collection had spun out of control, with a Bolt driver finding his data being used against him even though he had not signed up for any data-sharing program through GM, a Cadillac owner finding himself unable to buy insurance, and a Corvette driver claiming to be dinged for hard driving on a track day.

It is important to note that GM’s decision to backtrack on the sale of this sort of data doesn’t necessarily mean that the automaker is legally in the wrong. That said, you can expect a number of additional cases to arrive before this situation is fully settled. Either way, the automaker has hurt its standing with the public as a result.

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