While data privacy concerns can be overhyped, they become a real problem when personal data is used to determine insurance premium, loan rates, etc.
In modern connected cars, every interaction is registered and stored on a server. These features are designed to enhance the user experience and help carmakers improve their products. However, a new report reveals that nearly all car manufacturers are selling users’ personal data. Let’s explore the key findings of this investigation.
Carmakers selling driver behaviour data
General Motors was recently in the news when it was ordered by the Federal Trade Commission to stop selling driver data for five years. It was alleged that the carmaker was collecting and selling customers’ data without their consent or knowledge. This was being done via the company’s Smart Driver program. The data was reportedly being sold to credit bureaus such as Experian, Equifax and TransUnion.
While General Motors grabbed headlines, a new investigation by Consumer Reports reveals that most other carmakers in the United States are doing the same thing. Consumers’ driving behaviour data continues to be sold to third parties, even after the Federal Trade Commission ruling. Various types of data are being collected and sold. It includes the rate of acceleration, how hard the brakes were applied and how fast the driver negotiates corners.
Such data can be used to determine insurance premiums and car loan rates for online applications. While assessing user risk behaviour may be necessary for insurance companies, banks and financial institutions, the worrying thing is that personal data is being collected without proper knowledge or consent of users. Terms and conditions and privacy policies displayed on the infotainment screen or the connected smartphone come with an ‘OK’ button that everyone presses without reading. That’s why most people are not even aware that their personal data is being collected and sold to third parties.
Though the report did not say anything about Indian automakers, on Reddit one user revealed – “We have teams working with data that is collected by one of India’s auto majors, a group company, trying to develop predictive collision avoidance with AI.”
Willingness to share driving data
Many consumers will feel cheated when carmakers sell their personal data without their consent. However, there is also the group of users who may be willing to share such data. For example, a survey conducted by LexisNexis Risk Solutions revealed that many consumers were willing to share driving data, as it could reduce their insurance premiums. LexisNexis is one of the largest data brokers in the United States. It has partnerships with multiple carmakers.
What can users do?
In the case of folks who do not want to share their driving data, they can benefit from new privacy laws. Several states in the United States have enacted special privacy laws. California was the first state that provided consumers the freedom to opt out from data collection programs. Similar laws have been made by 15 other states. Users residing in these states can submit a request to the carmaker to opt out from driving data collection and its sales. They can also request their personal data to be deleted.
The requests are named accordingly – ‘Right to Opt Out’, ‘Right to Limit the Use and Disclosure of My Sensitive Personal Information’ and the ‘Right to be Deleted’. However, making such requests could also mean losing access to some of the connected features. For example, roadside assistance and crash detection services may not be available. Similarly, remote door locking from the smartphone won’t be accessible. Ultimately, it is up to the user to decide whether these trade-offs are acceptable.
