California Reaches $12.75 Million Settlement with GM Over OnStar Selling its ‘Smart Driver’ Customer Data to Insurance Brokers

California has reached a record-setting privacy settlement with General Motors, ordering the automaker to pay $12.75 million over allegations that it quietly sold OnStar customer data for years without properly informing drivers or obtaining their consent. State officials say it is the largest penalty ever issued under the California Consumer Privacy Act.

Attorney General Rob Bonta announced the agreement on May 8, accusing GM of funneling the personal information of hundreds of thousands of California drivers to data brokers LexisNexis Risk Solutions and Verisk Analytics between 2020 and 2024. According to the complaint, GM harvested names, contact details, precise vehicle location, and driving behavior metrics — including hard braking, acceleration, and speed — through its OnStar services.

Investigators say that data was then sold to the brokers, who used it to help insurance companies build driver risk profiles. While California law prevents insurers from using such data to set premiums, Bonta said the practice still represented a serious breach of consumer trust.

“GM sold the data of California drivers without their knowledge or consent and despite numerous statements reassuring drivers that it would not do so,” Bonta said, calling the information “precise and personal location data that could identify the everyday habits and movements of Californians.” Bonta also claimed GM violated state privacy law by retaining data longer than necessary and selling it for purposes unrelated to OnStar’s stated services.

The state’s probe began after a 2024 New York Times investigation revealed that multiple automakers — including GM — were sharing telematics data with insurers, sometimes contributing to higher premiums in other states. California regulators say GM earned roughly $20 million nationwide from those data sales.

The settlement arrives as GM is already under sweeping federal restrictions. In January, the Federal Trade Commission finalized an order banning GM and OnStar from selling driver behavior or geolocation data for five years. That case centered on GM’s Smart Driver program, which was marketed as a safety tool but, according to the FTC, became a pipeline for detailed telematics data sent to LexisNexis and Verisk. The agency called GM’s conduct an “egregious betrayal of consumers’ trust.”

GM shut down Smart Driver in April 2024 and ended its contracts with both data brokers.

Under California’s settlement this month, GM must:

• Stop selling driving data to consumer reporting agencies for five years
• Delete retained driving data within 180 days
• Request deletion of previously collected records from LexisNexis and Verisk
• Implement stricter privacy compliance, including clearer disclosures and opt in consent
• Retain no past data, except where required for law enforcement

GM did not admit wrongdoing but agreed to the terms while maintaining that it has already taken steps to strengthen its privacy practices.

Following publication of the story on GM Authority, a GM spokesperson said the agreement “addresses Smart Driver, a product we discontinued in 2024,” adding that the company is committed to being “clear and transparent” about customer data and the choices drivers have.

Today, GM says customers picking up a new vehicle are explicitly asked at the dealership whether they want to allow data collection when enrolling in OnStar services — and that OnStar features still function even if they decline. The company also says it will continue collecting some anonymized data for internal research, but it cannot be used for marketing or sold to third parties.

Between the state settlement and the FTC’s federal order, GM now faces some of the strictest connected vehicle privacy rules in the country — a dramatic shift for an automaker that once treated driver data as a lucrative, largely invisible revenue stream.

Source:
gmauthority.com

Related:
GM is Now Facing a Lawsuit for Selling OnStar Driving Data to Insurance Companies and Data Brokers
GM Ends Program that Shared Customer Driving Data with Brokers and Insurance Companies
FTC Bans General Motors and OnStar From Selling Your Driving Data for Five Years

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