Two US senators are urging the Federal Trade Commission to investigate whether three automakers sell customer driving data to brokers.
It is claimed the data, reportedly including details like sudden braking and acceleration, is packaged and sold to insurance companies.
Senators Ron Wyden of Oregon and Edward Markey of Massachusetts voiced their concerns in a letter addressed to FTC Chairwoman Lina Khan.
They accuse General Motors, Honda, and Hyundai of employing deceptive practices to coax customers into agreeing to share their data.
The senators’ concerns were amplified following a report by The New York Times, prompting Wyden’s office to investigate the matter further.
The investigation found GM, Honda, and Hyundai have disclosed driving data to broker Verisk Analytics.
The automakers confirmed this data-sharing arrangement.
GM admitted to sharing location data with two unnamed companies.
Verisk reportedly used the data to compile reports on driving behavior, which were then sold to insurance companies.
The senators argue some automakers misled customers by suggesting that sharing data could reduce insurance premiums, without informing them that it could also result in higher rates.
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 extent of data shared varies among the automakers.
According to the letter, Hyundai shared data from 1.7 million vehicles and received over $1 million, while Honda received nearly $26,000 for data from 97,000 vehicles.
GM did not disclose the number of vehicles involved or the amount received.
GM:“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”
GM denied it misled customers into enrolling in the data-sharing program with Verisk.
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The company said the partnerships with Verisk and LexisNexis were terminated in March, and its “Smart Driver” program concluded in June.
It 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.”
Hyundai and Honda similarly defended their practices.
Hyundai said customers had to actively consent to data sharing, which could potentially lead to discounts from insurers.
Honda said identifiable consumer information was only shared if customers explicitly opted for insurance offers based on good driving scores.
Verisk responded by asserting that it ensures data is used responsibly, a fundamental principle of its business.
The company said its actions are in line with appropriate data use practices.
The FTC has yet to comment on the senators’ request for an investigation.
