Mercedes-Benz defends sharing vehicle tracking data with repossession companies

The company says the sensors are only activated in "extreme circumstances."

Mercedes-Benz has responded to uproar in the UK after a report accused the company of secretly using tracking devices and sharing location data with third-party repossession firms.

The company told The Sun that it only activates the tracking functions in "extreme circumstances" when a buyer has fallen behind on payments and fails to respond to contact requests.

Tracking a vehicle without the driver's permission is said to be illegal in the UK. The automaker says a clause describing "location sensors" can be found in the terms and conditions in finance agreements above the customer's signature, however.

"When a customer chooses to finance the purchase of their car this way they sign a contract and agree to the location sensors in the car being activated in the event that they default or breach their agreement," the company said in a statement. "Locating the car is part of the repossession process and is not permanently tracking customers."

The practice is well known in the US but typically associated with subprime loans and "buy here pay here" used car dealerships. The US Federal Trade Commission in 2017 launched an investigation into a subprime lender's policies regarding installation of GPS starter interrupters, which can track and disable a vehicle if the borrower defaults on a loan agreement.

Mercedes-Benz parent Daimler in 2014 declared "data protection is customer protection" and promised to allow customers to decide how their data are used. The company listed "contractual agreement" as an acceptable form of consent, however, equivalent to presenting an opt-in prompt on an infotainment display.

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