Senators call on FTC to investigate automakers’ sale of driving data to brokers
DETROIT– Two U.S. senators are calling on the Federal Trade Commission to investigate automakers that sell customers’ driving data to brokers, who then bundle the data and sell it to insurance companies.
In a letter to FTC Chair Linda KhanDemocrats Ron Wyden of Oregon and Edward Markey of Massachusetts allege that General Motors, Hyundai, Honda and possibly other companies are sharing driver data, such as data on sudden braking and acceleration.
The automakers used deceptive tactics to manipulate customers into agreeing to release their data to intermediaries, the senators said in a statement Friday.
After reading a report in The New York Times, Wyden’s office investigated the three automakers and discovered that they shared data with broker Verisk Analytics. In the letter to Khan, the senators wrote that all three automakers confirmed the disclosure of the data. GM also confirmed that it disclosed customer location data to two other companies that the automaker declined to name, the letter said.
Verisk used the data to create reports on driving history and sold it to insurance companies, the letter said. Some automakers may have misled customers by advertising data disclosures as a way to lower insurance bills without telling them that some insurers could charge more, the senators wrote.
“If the FTC finds that these companies violated the law, we urge you to hold the companies and their top executives accountable,” the senators wrote to Khan.
GM declined to say how much vehicle data was sent to brokers or what it paid for it, the letter said. Wyden’s office found that Hyundai shared data on 1.7 million vehicles and was paid just over $1 million, while Honda was paid just under $26,000 for data on 97,000 vehicles, the senators said.
A message was left after closing time on Friday asking the FTC for comment.
In an email, GM denied that it misled customers into signing up for its data-sharing program with Verisk. Data-sharing partnerships with Verisk and LexisNexis were canceled in March, and the data-sharing program called “Smart Driver” ended in June, GM said.
“Data was only shared with an insurer if a customer requested a quote directly from their chosen insurer and gave separate consent to that insurer to do so,” the email said.
The company says it does share “anonymized” data with partners to improve city infrastructure and make roads safer.
Hyundai said in a statement that the senators’ letter misrepresented the company’s data policies and that it has taken steps to ensure customers agree to share driving data with insurers.
Customers could choose to link their driving scores to their insurer via Verisk, allowing them to take advantage of potential benefits such as discounts for good driving behavior.
“It is important to note that Verisk is not authorized by Hyundai or the customer to share Drive Score data with insurers until the customer has explicitly 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 records were given the opportunity to opt in to discount offers from insurers. “Without that clear second opt-in by the customer, no identifiable consumer information was shared with an insurance company,” Honda said.
Verisk also disagreed with Wyden and Markey, saying in a statement that it “ensures that data is accessed and used appropriately.” The company said that using data responsibly “is the cornerstone of our business.”