Automaker General Motors Co. (NYSE:GM) and its unit OnStar will be banned for five years from disclosing driver information to consumer reporting agencies, the U.S. Federal Trade Commission (FTC) said on Thursday.

What Happened: The ban follows the agency’s allegations that GM and its unit collected, used, and sold drivers’ data without adequately informing consumers or obtaining their consent. The data in question included drivers’ precise geolocation data and driving behavior data from millions of vehicles which can be used to set insurance rates, the agency said.

"GM monitored and sold people's precise geolocation data and driver behavior information, sometimes as often as every three seconds," said FTC Chair Lina M Khan. "With this action, the FTC is safeguarding Americans' privacy and protecting people from unchecked surveillance."

GM and Onstar must now take consent from consumers before collecting vehicle data and also provide an option for consumers to seek deletion of their data, the agency said.

GM sold data including every instance of hard braking, late-night driving, and speeding to consumer reporting agencies who then used it to compile credit reports on consumers which were used by insurance companies to deny insurance and set rates, FTC said in a statement.

GM Responds: General Motors said in a statement that it ended the program as part of which it collected the data across all its vehicles last year and ended its “third-party telematics relationships” with data analytics firms LexisNexis and Verisk

“As part of the agreement (with FTC), GM will obtain affirmative customer consent to collect, use, or disclose certain types of connected vehicle data (with exceptions for certain purposes). The duration of the agreement is 20 years,” the company said.

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