State Lawsuit Exposes How Automakers Handle Your Driving Data

When Nebraska’s attorney general filed a lawsuit against General Motors (GM) and OnStar, it sent shockwaves through both the auto industry and the consumer privacy landscape. The suit claims that for years Nebraskans’ sensitive driving data—covering everything from speed and braking habits to precise location—was collected, processed, and sold without clear consent. This controversy has raised urgent questions about transparency, consumer rights, and how automakers should handle your personal data.

The Heart of the Lawsuit

What Nebraska Alleges

On July 8, 2025, Nebraska Attorney General Mike Hilgers officially announced legal action against GM and its subsidiary OnStar. The lawsuit contends that the companies secretly collected data from vehicles fitted with telematics systems and sold that information to third-party brokers. These brokers then compiled “Driving Scores” used by insurance companies to adjust premiums, deny coverage, or even cancel policies.

Hilgers argued, “Nebraskans deserve to work with companies that are truthful and honest about what they are doing. That is not what happened here.” The case centers on the claim that GM misled customers—many of whom believed that enrollment in OnStar was part of receiving essential safety features—by failing to disclose that these services allowed for extensive data collection and subsequent sale.

How the Data Was Collected and Sold

GM and OnStar outfitted vehicles with telematics systems that continuously gathered data every few seconds. This data covered:

• Driving behaviors such as speed, hard braking, rapid acceleration, and sharp turns.
• Geolocation tracking, often updated more than once per minute.
• Vehicle usage details like seatbelt engagement and even entertainment preferences.

Consumers were often unaware of these invasive practices because enrollment in OnStar was portrayed as a routine part of vehicle purchase and safety. Dealership employees, influenced by internal incentives, would enroll customers without explicitly stating that their data could later be sold. Once aggregated, third-party brokers like LexisNexis and Verisk processed the data into risk scores. Insurance companies then used these scores to determine policies that could lead to unpredictable hikes in premiums or outright policy cancellations.

Legal Grounds and Demands

Nebraska’s lawsuit accuses GM of violating the Nebraska Consumer Protection Act and the Uniform Deceptive Trade Practices Act. The state is seeking civil penalties, restitution for consumers who suffered financial harm, and an injunction to halt these data practices in Nebraska. The legal action is not just about punishing wrongdoers—it is a push for greater corporate accountability and transparent data practices.

Broader Impact: Consumers and the Auto Industry

What This Means for Consumers

This lawsuit has far-reaching implications for everyday drivers:

• Privacy Concerns: The case brings to light the invasive nature of connected vehicle technology. Most drivers have little idea that their driving patterns are recorded and monetized, fueling concerns about how personal data is used.
• Financial Risks: Data-driven “Driving Scores” have tangible consequences, with many consumers facing unjustified increases in insurance rates or cancellation of policies without any warning or recourse.
• Trust and Transparency: When automakers appear to hide their true data practices, consumer trust erodes, making drivers more hesitant to adopt connected technologies that could otherwise enhance safety and convenience.

The Auto Industry Under Scrutiny

Nebraska’s legal action is part of a broader, national trend scrutinizing how automakers collect and use data:

• Regulatory Oversight: Other states, including Texas, have initiated similar lawsuits. The Federal Trade Commission (FTC) has also targeted GM, proposing strict measures—a potential five-year ban on selling just such sensitive driving data—if transparency is not improved.
• Operational Reforms: Automakers are now facing immense pressure to modify their data collection practices. This might involve overhauling telematics systems, updating customer agreements, and implementing clear opt-out provisions.
• Reputational Risks: Beyond legal and financial repercussions, there is a significant threat to brand reputation. Public sentiment can shift quickly when consumers feel exploited or deceived.

The Push for Stricter Regulations

In response to the growing unease surrounding privacy, several states are already reforming data privacy laws:

• California now mandates clear disclosure of in-vehicle cameras and restricts data sharing without explicit consent.
• New Jersey requires that personal data be erased during vehicle trade-ins or resales.
• Tennessee is considering a statewide registry allowing drivers to opt out of data collection.

These moves underscore that consumer protection is gaining traction at both state and federal levels. A legal precedent set by Nebraska could very well encourage the development of comprehensive national data privacy regulations.

GM and OnStar’s Public Response

To date, GM and OnStar have issued minimal comment on the lawsuit. Historically, GM has defended its data collection practices by asserting that such measures are part of the essential functionality of modern vehicles. In previous disputes, GM maintained that customers provided their consent when signing up for services like OnStar. However, the Nebraska lawsuit contends that the consent obtained was misleading and insufficient, arguing that disclosures were buried in long privacy policies that few read in detail.

Without a timely and satisfactory response, GM risks further damaging its public image, providing regulators and consumer advocates additional ammunition to push for stricter oversight of informational practices in automotive technologies.

What’s Next for Drivers and the Industry

Consumer Action and Awareness

The unfolding drama serves as a critical reminder for all connected vehicle owners to:

• Review Privacy Settings: Take time to understand the terms and conditions of telematics services provided with your vehicle.
• Demand Transparency: Insist on clear, easy-to-understand disclosures regarding data collection and sharing practices. Ask your dealer explicitly what data is being captured and how it is used.
• Support Policy Change: Engage with consumer advocacy groups and support legislative efforts that promote stronger data privacy protections.

The Road Ahead for Automakers

For automakers like GM, this lawsuit marks a turning point. They must decide whether to:

• Embrace transparency and redesign their data practices to honor consumer privacy.
• Continue with opaque practices at the risk of accumulating legal battles, hefty fines, and loss of consumer confidence.

This lawsuit not only challenges GM and OnStar but sets a benchmark for the entire automotive industry. Companies that prioritize customer rights and transparent data handling are likely to emerge stronger in the long run.

Why This Lawsuit Matters

The Nebraska lawsuit against GM and OnStar stands as a significant moment in the evolving conversation about data privacy in the age of connected vehicles. As technology advances, so too must the principles that protect consumer privacy and ensure that companies remain accountable. This case signals a shifting balance of power—one in which drivers are increasingly empowered to demand better practices, clearer disclosures, and fair treatment.

Take action now by reviewing your vehicle’s data settings, supporting consumer-friendly privacy reforms, and holding companies accountable for their practices. Your data, your rights, and your trust in the auto industry depend on it.