General Motors’ (GM) recent $220 million settlement over allegations of consumer privacy violations serves as a costly reminder that inadequate privacy governance can expose businesses to significant financial liabilities. The settlement, involving a coalition of 36 state attorneys general, followed allegations of data collection and sharing without appropriate consent. The information was reportedly shared with data brokers and subsequently used by insurance companies to assess drivers’ risk profiles and determine premiums.

For businesses, the implications extend well beyond regulatory compliance. The GM settlement reinforces an increasingly important reality: organizations must actively focus on the financial liabilities of privacy noncompliance.

Privacy Compliance Goes Off the Road

The GM settlement highlights how gaps in everyday data governance practices can escalate into significant financial liabilities. Businesses must recognize and address the following risks before they attract regulatory scrutiny or consumer litigation.

• Consent Management Failures: Obtaining valid, informed, and explicit consent is fundamental to responsible data processing. Ineffective consent mechanisms can expose businesses to substantial legal risks. Organizations must obtain consent through transparent, verifiable processes and ensure consumers understand how their information will be collected, processed, and shared.
• Undisclosed Third-Party Data Sharing: Sharing personal information with external vendors, data brokers, or business partners without adequate disclosure or authorization can significantly increase an organization’s legal and financial exposure. The GM case illustrates how consumer data collected for one stated purpose can eventually be used for another, potentially affecting individuals in ways they never anticipated.
• Inadequate Data Governance and Oversight: Privacy policies alone cannot guarantee compliance when organizations lack visibility into their data processing activities. Without a comprehensive data inventory, businesses may struggle to identify what personal information they collect, where it resides, who can access it, and how it is used. Weak oversight can allow unauthorized processing activities and noncompliant practices to continue undetected.

Proactive Privacy Risk Management

The GM settlement demonstrates why businesses must move beyond policy-driven compliance and establish proactive privacy governance strategies that reduce regulatory, operational, and financial exposure. Here are five measures organizations should prioritize to avoid similar situations.

• Treating Privacy Risks as Financial Risks: Businesses must recognize that privacy violations can result in substantial financial liabilities, including regulatory penalties, litigation expenses, settlements, and reputational damage. Organizations should integrate privacy risks into their enterprise risk management strategies, quantify potential financial exposure, and evaluate whether their existing insurance coverage adequately addresses privacy-related liabilities.
• Comprehensive Data Inventory: Businesses cannot effectively govern personal information without knowing what data they collect, where it resides, how it is processed, and who has access to it. Organizations should establish a centralized, continuously updated inventory of personal data, processing activities, and connected systems.
• Defensible Audit Trails: Businesses must maintain verifiable evidence demonstrating that their privacy practices align with applicable regulatory requirements. This includes documenting consent transactions, privacy notices, data-sharing activities, third-party assessments, and remediation efforts.
• Effective Consent and Preference Management: Organizations must ensure consumers provide informed and valid consent, where required, before collecting, processing, or sharing their personal information. Consent mechanisms should clearly communicate the purposes of data collection, categories of information involved, and any intended third-party disclosures.
• Continuous Third-Party Privacy Assessments: Businesses must extend their privacy governance practices beyond internal operations to include vendors, data brokers, technology providers, and other external partners handling personal information. Organizations should conduct privacy risk assessments before onboarding third parties and periodically reassess their data processing activities, security controls, and compliance obligations.

Truyo Privacy and Truyo Core Consent help businesses establish transparent, configurable privacy compliance and consent experiences. With customizable consent templates, centralized preference management, third-party vendor assessments, and more, Truyo helps businesses identify and mitigate privacy compliance gaps to avoid legal liabilities. It’s this commitment that led to Truyo being recently recognized as a leader in the 2026 Gartner® Magic Quadrant™ for Privacy UX.

Additionally, the Truyo Warranty Certification Program acts as a safety net for the financial liabilities for privacy compliance. With a coverage of up to $50k upon compliant implementation of Truyo Privacy, Consent, and Compliance Advisor, Truyo can be the first line of defense for businesses.

The Cost of Privacy Compliance

The GM settlement is a reminder that privacy compliance failures can have consequences far beyond regulatory scrutiny. As businesses collect and share increasing volumes of personal information, they must ensure that their privacy governance practices can withstand both regulatory investigations and financial risks. Organizations must also consider financial protection mechanisms that provide an additional safety net against eligible privacy-related liabilities. The cost of preparing for privacy compliance is far more predictable than the cost of failing to maintain it.