State sues General Motors, OnStar, claiming deceptive practices

Indiana Attorney General Todd Rokita has filed a lawsuit accusing General Motors and its subsidiary OnStar of engaging in deceptive practices by collecting and selling Indiana drivers’ personal data to third parties including insurance companies without their knowledge or consent.

“Everyone deserves transparency and honesty from the companies they do business with, especially when it comes to having their data protected,” Rokita said in a press release. “General Motors and OnStar turned a supposed safety feature into a way to make money, profiting off Indiana drivers without their knowledge. We’re taking action to hold them accountable and protect our consumers from these deceptive practices.” 

The complaint claims General Motors has marketed their OnStar “Smart Driver” system as a way to “maximize vehicle performance, while reducing the rate of wear and tear,” but instead sold customers’ driving data in order to raise insurance rates and collect their share of the deceptive dollars. 

The Indiana Capital Chronicle reported that GM reached a settlement with the Federal Trade Commission earlier this year and halted the Smart Driver program in 2024, unenrolling customers and ending their third-party relationships, according to a January news release.

“Respecting our customers’ privacy and earning their trust is deeply important to us. Although Smart Driver was created to promote safer driving behavior, we ended that program due to customer feedback,” the statement read. “… The FTC consent order includes new measures that go above and beyond existing law, while capturing steps we’ve already taken to establish choices for customer data collection and communications about how the information is used.”

Under the agreement, the company “will” obtain affirmative consent from costumers to collect, use or disclose certain vehicle data for the next 20 years.

Rokita’s lawsuit, filed in Marion Superior Court, alleges General Motors and OnStar misrepresented their telematics system as a safety and convenience feature for consumers while using it to harvest detailed driving behavior and location data—such as speed, hard braking, and late-night driving habits—and selling it to data brokers for profit.

The brokers then created risk profiles and driving scores, which were sold to insurers, resulting in higher premiums or canceled policies for unsuspecting Hoosiers, the lawsuit alleges. 

“Hoosiers were secretly misled and used,” Rokita added. “Their actions are unacceptable and we’re fighting back to ensure this type of behavior never happens again.” 

The complaint alleges that for years, General Motors has used unfair, abusive, deceptive acts, and omissions to hide its data sharing practices from consumers. It asserts that General Motors coerced them into activating OnStar in their vehicles and enrolling in services as part of an “onboarding” process. General Motors then treated consumers’ enrollment as consent to collect and sell their driving data, without ever explicitly informing them of these practices. 

The lawsuit claims the company has violated the Indiana Deceptive Consumer Sales Act. It requests a jury trial and an injunction to stop the company from engaging in the alleged practices.

It further requests the state be awarded civil penalties for each violation and all other relief and expenses the court sees fit.

The attorney general’s office is encouraging Hoosiers to contact its consumer affairs division if they believe they have been impacted by OnStar’s practices. Consumers can file a complaint by visiting indianaconsumer.com or calling 1-800-382-5516.