Automakers Sold Drivers’ Data for Shockingly Low Amounts of Money

• A letter to the Federal Trade Commission from two U.S. senators explains that automakers sold drivers’ data for a shockingly low amount.
• The letter marks an escalation from a New York Times report that was published in March of this year.
• The letter from the senators focuses on GM, Honda, and Hyundai because all three sold data to Verisk, according to the initial NYT report.

UPDATE 7/31/24: This story has been updated to include a statement from Hyundai regarding the brand’s relationship with the data broker Verisk.

If you drive a car that’s capable of connecting to the internet, the manufacturer may be collecting and selling data based on your driving habits to third-party data brokers. A report by the New York Times in March detailed the practice, and now a letter by U.S. senators Ron Wyden and Edward J. Markey to the Federal Trade Commission explains how little manufacturers actually made.

In the letter, Wyden and Markey chose to focus on three automakers: GM, Honda, and Hyundai. That’s because all three sold data to the data broker Verisk. In turn, Verisk sold the data to auto insurers, helping them to assign risk scores. According to the letter, one of the company’s products, which it shut down following the NYT report, rated drivers’ driving habits with data collected from internet-connected cars.

One shocking revelation from the letter is just how little the manufacturers actually profited from selling the data. Staffers from Sen. Wyden’s office investigated the three automakers and found that Verisk paid Honda $25,920 over four years for information about 97,000 cars, amounting to just 26 cents per car. Hyundai was paid just over $1 million for data on roughly 1.7 million cars over a six-year period, totaling 61 cents a car. GM would not reveal how much it was paid, according to Sen. Wyden, though a new report this week from the New York Times suggests the manufacturer sold data for more than 8 million cars.

“Companies should not be selling Americans’ data without their consent, period,” wrote the senators. “But 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.”

The letter also details that while GM and Honda customers had to opt in for their data to be shared, Wyden referred to the process as “deceptive.” Hyundai, on the other hand, confirmed to Wyden’s office that customers who enabled internet access in their vehicles were automatically enrolled for their data to be shared with Verisk.

Car and Driver received a statement from Hyundai regarding the brand’s relationship to Verisk. “Regrettably, Senator Wyden’s letter mischaracterizes Hyundai’s data policies and the safeguards it implemented to ensure customer consent for sharing driving behavior information with insurers. The letter also inaccurately describes the customer consent required for the sharing of customer driving behavior data with Verisk, a third-party data-sharing service provider. Each customer’s vehicle usage-based “Drive Score” information was activated only after the customer affirmatively opted into Hyundai’s BlueLink connected car suite of services. It is important to note that Verisk was not authorized by Hyundai or the customer to share the Drive Score data with insurers until the customer affirmatively consented to this on an insurer’s website or app.”

The good news for drivers concerned about their data being sold to insurance companies is that following the report in March, Verisk shut down the program in April. The letter concludes with the senators urging the FTC to investigate the practice within the industry and to hold the senior executives accountable.

This story was originally published July 28, 2024.

Source: Motor - aranddriver.com