Automakers Sold Driver Data To Insurance Companies For Next To Nothing

Your car has been spying on you and collecting data. That alone is worrying to many, but a recent letter sent to the Federal Trade Commission (FTC) by two U.S. Senators show something even more sinister: That data is being sold for pennies on the dollar to insurance companies.

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The New York Times reports Senators Ron Wyden of Oregon and Edward J. Markey of Massachusetts — both privacy advocates — sent a letter to the FTC on July 26th. In it, the senators called out General Motors, Hyundai and Honda for collecting driving data from customer vehicle. The data collected was on things like how fast a driver accelerated, how hard they braked and how often they went over the speed limit. The letter then says this data was sold to insurance companies so they could gauge driver risk.

One of the surprising findings of an investigation by Senator Wyden’s office was just how little the automakers made from selling driving data. According to the letter, data analytics firm Verisk paid Honda $25,920 over four years for information about 97,000 cars, which works out to 26 cents per car. Hyundai was paid just over $1 million, or 61 cents per car, over six years.

While GM wouldn’t exactly say how much it sold the data for, sources close to the matter told The Times the automaker sold data on over eight million cars in the “low millions of dollars” range. Worse yet is how the automakers informed drivers their data was being collected. The Times says Hyundai collected data on any vehicle with an internet connection. GM and Honda gave drivers the choice to opt in, but Senator Wyden says it was deceptive.

Since the original reporting on the data collection, GM stopped collecting data. However, a letter from the automaker to the FTC says the automaker still shares location data, that “it did not seek consent from customers to share the location of their cars” and that the only way to to stop the location sharing is to disable the car’s internet connection. Hyundai and Honda both issued statements about the situation to The Times:

A spokesman for Honda, Chris Martin, said that Verisk had provided a driving score service to its customers, and that “no identifiable consumer information was shared with any insurance company” without customers’ opt-in.

Hyundai also provided a driving score service. Ira Gabriel, a company spokesman, said the terms and conditions of its Bluelink connected car service had informed customers that data would be shared with Verisk when they activated Bluelink at the dealership. Verisk shared the data with insurance companies only with a customer’s consent, Mr. Gabriel said.

“Verisk paid Hyundai for potential future earnings from customers who affirmatively opted into the insurance feature,” he said in a statement.

The Times says this is the third letter the FTC has received from congress calling for an investigation into the data collection. Senators Wyden and Markey hope that FTC chairwoman Lina Khan looks into it, with their letter saying Americans driving data should not be sold without their consent:

…it is particularly insulting for automakers that are selling cars for tens of thousands of dollars to then squeeze out a few additional pennies of profit with consumers’ private data.