Texas Attorney General Ken Paxton alleges the collection and selling of data on customers' driving habits ended up in the hands of insurance companies, raising some customers' rates.
Here's why Texas Attorney General Ken Paxton is suing a major car maker, and why he alleges their actions led to higher car insurance rates.
With the lack of a detailed, modern data privacy and security law at the federal law, many states are stepping in to pass their own regulations to protect consumers in the ever-growing data brokerage market. General Motors sold this information to several other companies, including to at least two companies for the purpose of generating "Driving Scores" about GM's customers, the AG alleged. The suit said those two companies then sold these scores to insurance companies.
But the attorney general's office claimed GM "deceived" its Texan customers by encouraging them to enroll in programs such as OnStar Smart Driver. But by agreeing to join these programs, customers also unknowingly agreed to the collection and sale of their data, the attorney general's office said.
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