OnStar Changes Policy, Will Not Track Former Customers

DETROIT (WWJ) -- OnStar is backing off on its controversial policy of collecting information on customers even after they've cancelled their service.

"I am sorry for any confusion or concerns we might have caused," said OnStar President Linda Marshall in a video posted on the GM Media web site.

OnStar had planned to implement the new policies as of December 1, and had planned to allow customers to opt out. But, customers would have had to specifically request not to have their information collected.

That created a controversy that had reached Congress, with Senator Charles Schumer asking for an FTC investigation into the practice.

Schumer, in a message sent out on Twitter today, said OnStar's decision to back off on the policy "will put privacy decisions back where they belong, in the hands of individuals."

It didn't take long after that for OnStar to end the controversial policy.

"They had to act quickly, and they had to act decisively," said University of Detroit Mercy marketing professor Michael Bernacchi.

Bernacchi said the power of Congress, amplified by the Internet, put a lot of pressure on OnStar in a short time, and more pressure would have been coming.

"The hue and cry would have been significant. The social media would have been overwhelming."

OnStar's Linda Marshall said they never intended to violate anybody's privacy. She said they wanted to keep collecting the data to help the company develop future products and to help former customers in an emergency.

"It could allow us to provide former customers with vital information in crisis situations."

Marshall said if they decide to keep collecting this information in the future, they will ask customers before they do anything. Analysts say that would be a much better policy.

"OnStar's reversal of policy is good news," said Jeremy Anwyl, CEO of Edmunds.com. "Consumer tracking, whether across town or across the Internet, should always be an opt-in. OnStar is setting an example that others should follow."

Connect with Jeff Gilbert
Email: jdgilbert@cbs.com
Twitter: @jefferygilbert
Facebook: Facebook.com/carchronicles