Insight

The Hidden Dangers of In-Car Tech to Consumer Privacy

The Hidden Dangers of In-Car Tech to Consumer Privacy

Eric L. Johnson

Eric L. Johnson

August 11, 2021 01:31 PM

When you start your car, a notice may pop up on the car's onboard navigation computer screen. The notice may ask you to agree to provide certain information to the car's manufacturer regarding the car's performance and information about you and your driving history. This notice asks you to agree or decline to provide that information to the manufacturer. What you may not see, and what you may not provide specific consent for, is a treasure trove of personal information that a car may capture about you, your contacts, and your car's location.

For example, whenever you connect your cell phone to a car's infotainment center, you are giving that car access to such things as your personal and business contacts, call logs, text messages, navigation history, home and work addresses, garage codes, passwords, IDs, health and other biometric information, credit information, user profiles, and third-party apps.

Hidden within most of the cars sitting on your lot are potential claims for breach of a consumer's privacy. There are already class action cases in play where the plaintiffs have argued that rental car companies captured their personal information without their consent and breached their constitutional right to privacy when the companies allegedly failed to delete that information when the rental cars were returned. The plaintiffs also argued that the companies committed unfair business acts by not having "responsible policies and procedures" regarding the deletion of personal information and by engaging in conduct that is "immoral, unethical, oppressive, unscrupulous, or substantially injurious."

This recent litigation highlights the privacy risks to all vehicle dealerships that acquire, sell, and finance used vehicles that may have captured consumers' personal information. In addition, this practice has drawn interest from the Federal Trade Commission, which has indicated that it is looking into the collection and storage of vehicle data. A used car dealer is particularly at risk of a federal or state law claim if it is passing along unprotected, unredacted, unencrypted consumer data in a vehicle that it sells.

Some state laws and regulations come with statutory penalties in the $500-$7,500 range per VIN, and many of these laws and regulations come with a private right of action. Attorneys' fees and costs could be awarded to the victor, too. State privacy laws, such as the California Consumer Privacy Act and the new Virginia Consumer Data Privacy Act, state unfair and deceptive acts and practices laws, state data security laws, and other state laws could be impacted. Federal laws may also apply, with civil penalties for a UDAP violation now at over $43,792 per occurrence.

Some questions to ask yourself:

  • Do you operate any dealerships in a "handsfree" or "no-text-and-drive" state?
  • Do you have a vehicle loaner, rental, or carsharing program?
  • Do you serve customers with sensitive information/special privacy considerations, such as customers in the government, military, or law enforcement or who otherwise have security clearance? What about high net worth individuals, C-level executives, those who work in HR, IT, or security departments? What about customers who may have been victims of a crime or harassment or who are in a protected class?
  • Do you sell (and upsell) vehicles with telematics/connected services?
  • Have you sold or will you sell at least one vehicle to one California resident in 2021?
  • Are you sure that no employees/contractors would help themselves to the personal information captured by a vehicle?
  • Do you have a policy on how to handle personal information that may be stored or processed by vehicles' systems?

Here are some basic first steps you may take to address these issues:

  • Know what personal information is collected by the vehicles you buy and sell. To make this determination, consider performing an audit of your vehicles;
  • Have a written policy addressing the collection, retention, and/or deletion of captured vehicle data;
  • Disclose to the consumer what information you collect and for what purpose and then honor that disclosure;
  • Only keep the information for as long as it is needed, and remember record retention requirements;
  • Consider differentiating between information left in a vehicle vs. information that may have been downloaded (e.g., at the service center) to serve the customer;
  • Consider differentiating between different vehicle types (e.g., lease returns you will not keep vs. trade-ins);
  • Revise your legal documents accordingly (e.g., sale or lease contracts, agreements with OEMs and other third parties, etc.); and
  • Prepare for a potential bad headline or lawsuit by engaging in public relations and contingency planning.

Remember that you don't have to go at this alone. Consider getting external advice from a service provider that has the expertise and specialized tools to "wipe" the data from the cars you buy for inventory, sell, and lease. There are ways to turn the deletion of customer data into a competitive advantage. For instance, privacy is a top-of-mind consumer issue, so being upfront and visibly implementing a deletion policy can be a reputation builder and source of differentiation. Keep an eye on legislative changes at the federal and state levels. Finally, don't forget about those pesky federal regulators like the FTC and the Consumer Financial Protection Bureau because they could be looking at you!

Related Articles

The Critical Role of Content in Law Firm SEO Strategy


by Nancy Lippincott

From building trust to staying competitive with thought leadership, explore how SEO content creation establishes authority in a largely digital landscape.

Animated internet servers, charts and laptop connected to SEO label

Hybrid Work: Coping with Compliance Consequences


by Gregory Sirico

Communications platforms like Webex by Cisco, Zoom and Microsoft Teams are more popular than ever in the age of hybrid work, but are firms risking compliance for convenience?

Compliances Issues with Hybrid Work

Government of the People


by Allyn Stern

A baker’s dozen tips for working with the Environmental Protection Agency

Tips for Working With the EPA

Compliance Confidence


by Jeffrey E. Stone, John Huang, and Michelle Gon

Turning risk into opportunity.

Compliance Confidence

Trending Articles

Presenting The Best Lawyers in Australia™ 2025


by Best Lawyers

Best Lawyers is proud to present The Best Lawyers in Australia for 2025, marking the 17th consecutive year of Best Lawyers awards in Australia.

Australia flag over outline of country

The 2024 Best Lawyers in Spain™


by Best Lawyers

Best Lawyers is honored to announce the 16th edition of The Best Lawyers in Spain™ and the third edition of Best Lawyers: Ones to Watch in Spain™ for 2024.

Tall buildings and rushing traffic against clouds and sun in sky

Best Lawyers Expands Chilean 2024 Awards


by Best Lawyers

Best Lawyers is pleased to announce the 14th edition of The Best Lawyers in Chile™ and the inaugural edition of Best Lawyers: Ones to Watch in Chile™, honoring the top lawyers and firms conferred on by their Chilean peers.

Landscape of city in Chile

Best Lawyers Expands 2024 Brazilian Awards


by Best Lawyers

Best Lawyers is honored to announce the 14th edition of The Best Lawyers in Brazil™ and the first edition of Best Lawyers: Ones to Watch in Brazil™.

Image of Brazil city and water from sky

Announcing The Best Lawyers in South Africa™ 2024


by Best Lawyers

Best Lawyers is excited to announce the landmark 15th edition of The Best Lawyers in South Africa™ for 2024, including the exclusive "Law Firm of the Year" awards.

Sky view of South Africa town and waterways

The Best Lawyers in Mexico Celebrates a Milestone Year


by Best Lawyers

Best Lawyers is excited to announce the 15th edition of The Best Lawyers in Mexico™ and the second edition of Best Lawyers: Ones to Watch in Mexico™ for 2024.

Sky view of Mexico city scape

How Palworld Is Testing the Limits of Nintendo’s Legal Power


by Gregory Sirico

Many are calling the new game Palworld “Pokémon GO with guns,” noting the games striking similarities. Experts speculate how Nintendo could take legal action.

Animated figures with guns stand on top of creatures

The Best Lawyers in Portugal™ 2024


by Best Lawyers

The 2024 awards for Portugal include the 14th edition of The Best Lawyers in Portugal™ and 2nd edition of Best Lawyers: Ones to Watch in Portugal™.

City and beach with green water and blue sky

The Best Lawyers in Peru™ 2024


by Best Lawyers

Best Lawyers is excited to announce the landmark 10th edition of The Best Lawyers in Peru, the prestigious award recognizing the country's lop legal talent.

Landscape of Peru city with cliffside and ocean

How To Find A Pro Bono Lawyer


by Best Lawyers

Best Lawyers dives into the vital role pro bono lawyers play in ensuring access to justice for all and the transformative impact they have on communities.

Hands joined around a table with phone, paper, pen and glasses

Presenting the 2024 Best Lawyers Family Law Legal Guide


by Best Lawyers

The 2024 Best Lawyers Family Law Legal Guide is now live and includes recognitions for all Best Lawyers family law awards. Read below and explore the legal guide.

Man entering home and hugging two children in doorway

Announcing The Best Lawyers in New Zealand™ 2025 Awards


by Best Lawyers

Best Lawyers is announcing the 16th edition of The Best Lawyers in New Zealand for 2025, including individual Best Lawyers and "Lawyer of the Year" awards.

New Zealand flag over image of country outline

The Best Lawyers in Colombia™ 2024


by Best Lawyers

Best Lawyers is honored to announce the 14th edition of The Best Lawyers in Colombia™ for 2024, which honors Colombia's most esteemed lawyers and law firms.

Cityscape of Colombia with blue cloudy sky above

Announcing The Best Lawyers in Japan™ 2025


by Best Lawyers

For a milestone 15th edition, Best Lawyers is proud to announce The Best Lawyers in Japan.

Japan flag over outline of country

Announcing the 2024 Best Lawyers in Puerto Rico™


by Best Lawyers

Best Lawyers is proud to announce the 11th edition of The Best Lawyers in Puerto Rico™, honoring the top lawyers and firms across the country for 2024.

View of Puerto Rico city from the ocean

The Best Lawyers in Singapore™ 2025 Edition


by Best Lawyers

For 2025, Best Lawyers presents the most esteemed awards for lawyers and law firms in Singapore.

Singapore flag over outline of country