GM OnStar lawsuit says data collected affects insurance

January 19, 2025 — A GM OnStar lawsuit has been settled 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.

General Motors has long offered OnStar as a service to assist consumers in emergencies and provide hands-free voice assistance as well as real-time traffic and navigation.

However, GM and OnStar have also been collecting data that, according to the FTC, “includes precise geolocation data – as often as every three seconds for some users.”

Every emergency braking, speeding, vehicle location and late-night driving incident is sold to agencies, which use the data to create consumer credit reports. The reports are allegedly used by insurance companies to set insurance rates or even deny coverage altogether.

The FTC said GM OnStar filed the lawsuit because GM allegedly failed to “disclose to consumers the type of information it collected through its Smart Driver feature.”

According to the GM OnStar lawsuit, the FTC said a new GM customer was advised to sign up for OnStar and Smart Driver, which would help the customer monitor their driving habits. But the government claims registration is confusing and misleading for consumers.

GM customers complained that their insurance rates were affected because they were unaware that their data would be sold to third parties.

The proposed order to resolve GM’s OnStar lawsuit says GM is prohibited from sharing or selling geolocation and driving behavior data to consumer reporting agencies for five years.

GM and OnStar must also “obtain consumers’ clear and express consent before collecting connected vehicle data,” unless it involves providing location data to emergency responders.