With navigational devices having become as ubiquitous to driving as windshield wipers and cruise control, at least one auto finance company is attempting to use global position systems (GPS) as a means of learning a little more about its customers.
According to several reports, Maine's Bureau of Consumer Credit Protection was recently queried from an out-of-state company as to the legality of using GPS tracking devices in vehicles it finances.
Bureau superintendent William Lund wouldn't name which company has made the inquiry, but noted that it was a national firm which is testing the consumer credit laws of several states.
Consumer privacy advocates have long feared that companies might attempt to use GPS devices as a window into learning the activity of its customers. In this case, the data from a GPS would be used to analyze the car purchaser's driving patterns - and weigh that data against a baseline of expected behavior. The results would then be used to determine if a specific car loan contract represents a good credit risk for someone planning to buy the loan in the secondary finance market, according to Lund.
"The consumer's application, would establish a 'baseline' of expected behavior, and the [risk] rating assigned to the contract would be determined by how closely the GPS tracking revealed that the consumer was fitting the pattern established by the application," Lund said.
That information, while no doubt extremely valuable from a business point of view, crosses a very thin privacy line.
Although Lund noted that the auto financing company had indicated its willingness to disclose to all consumers its use of GPS devices on the vehicles it finances, it is very unlikely consumers would actually notice the language, he said.