GM to Pay $220 Million Over Data-Tracking Claims, While Drivers See No Direct Compensation

Thirty-six state attorneys general won a $220 million settlement for their states, but drivers whose insurance costs may have been affected are not receiving any payment from it.

General Motors has agreed to pay $220 million to settle claims that it unlawfully sold or shared private driving and location data from millions of customers. The case drew comparisons to apps that track users without clear disclosure. In all, 35 states and the District of Columbia were involved, for a total of 36 attorneys general.

At the center of the case was Smart Driver, a GM program that regulators say was presented as a way to help drivers improve safety habits. Attorneys general say GM sold that information under contracts that said it would be used for insurance products.

Data brokers allegedly passed the information to insurers, who then used it to set or adjust premiums. Many of the drivers enrolled in Smart Driver were also using OnStar, GM’s connected-vehicle safety, navigation, and diagnostic service, which expanded the number of people potentially affected.

What the Settlement Requires

The agreement changes how GM must collect and disclose connected-vehicle data, beginning with a stricter consent rule.

Under the settlement, GM must get affirmative, express consent before collecting or sharing covered driving and location data. Passive enrollment or buried fine print will no longer be enough under the agreement.

GM is also required to reduce the amount of driving data it gathers and to maintain a comprehensive privacy program that undergoes both internal and external review. Dealership staff must also be trained so customers are not enrolled in data-collection programs without knowing it.

A GM spokesperson said connected-vehicle data helps deliver safer and more personalized services. The spokesperson said the company aims to be clear about what information is used, how it is protected, and what choices customers have about sharing it.

No Direct Payment for Drivers

The full $220 million will go to the states, not to individual drivers.

The settlement does not include consumer restitution. The money will be paid to the participating states, not to drivers whose insurance rates may have been affected by the data-sharing.

A separate private class-action lawsuit seeking money for affected drivers is still pending. Any drivers hoping for compensation would need to watch that case, not this multistate settlement.

Regulators Have Been Pressing the Issue

The settlement is one of several recent regulatory actions involving GM’s connected-vehicle data practices.

The Federal Trade Commission announced a proposed order in January that would bar GM and OnStar for five years from sharing drivers’ geolocation and behavior data with consumer reporting agencies. That information is collected through a vehicle’s embedded systems, a practice known as telematics. The proposed order also requires affirmative consent before such data is collected, with narrow exceptions such as sharing location information with emergency responders.

GM also agreed in May to pay $12.75 million, subject to court approval, to resolve a California investigation into alleged data sales to two brokers.

The Bigger Industry Question

The case raises a wider question about whether data gathered for safety programs was later used for insurance decisions without drivers knowing.

Insurers including Allstate, Progressive, and Geico use telematics programs, usually describing them as a way to reward safer drivers with lower premiums. The dispute over GM’s practices sharpens a question regulators say the industry has not answered clearly: did drivers knowingly consent to having data collected for safety purposes later used in underwriting? Concerns about third-party vehicle location tracking make that question even more urgent.

If you drive a GM vehicle and used OnStar or enrolled in Smart Driver, consider reviewing the following:

• Your connected-service enrollment status in the GM or OnStar app
• Privacy settings and any active data-sharing consents
• Any telematics consent you may have accepted at a dealership
• Opt-out options available through GM’s privacy portal

The settlement creates a clearer consent standard for GM’s future data practices. Whether it leads to any relief for drivers already affected will depend on the pending class-action case.