FREMONT, Calif. (Tom Vacar/KTVU) - Tesla has just been sued in Federal Court for violating numerous federal statutes regarding customers' credit and privacy rights. If this is proven, both Tesla and another major credit reporting agency may find themselves liable for deceptive acts violating Federal consumer rights.
"Information is money, said Abbas Kazeronian, a consumer plaintiff attorney who filed the suit on behalf of a southern California client.
The proposed class action lawsuit says before allowing a test drive, customers would have to produce a valid driver's license. Then, the suit alleges that, without the customer's consent, Tesla electronically scanned the data strip on the back of the license. The information was then immediately transmitted in to Tesla's database or other places for distribution to credit reporting agency Experian and others. The suit further alleges that Experian unlawfully used the information to create a credit score that Tesla could or did use to target the customer for sales and marketing efforts.
"Your data on your driver’s license is being used for very different reasons unbeknownst to the consumer," said attorney Kazeronian.
The suit says all these actions violated several federal consumer protection laws including The Driver's Privacy Protection Act, The Electronic Communications Privacy Act and The Fair Credit Reporting Act.
"Congress thought that this was an important issue and they went out of their way to create these statutes," said Kazeronian.
Car sales are regulated individually by the various states in which the cars are sold. But because this lawsuit alleges violations of federal statutes, literally every person who was subject to Tesla conduct, if proven, will benefit from this lawsuit.
Besides Tesla, the lawsuit names Experian and two other participating companies as defendants. The suit says an entire class of consumers was subject to illegal practices, justifying a class action lawsuit asking for potentially hundreds of millions of dollars in damages.
"It's willful conduct They knowingly were using that information in a nefarious manner," said Kazeronian.
Tesla issued a statement: "We take customer privacy extremely seriously, and this suit mischaracterizes how we actually handle and process customer data. Tesla has never and will never sell customer data to any third party, nor do we share customer data for any third party's own use."
Tesla contends it only checks credit once a customer has signed an application and that it takes names and other information voluntarily provided by customer, prior to test drives; information sometimes later used to send marketing information.