The state Bureau of Consumer Credit Protection Superintendent Will Lund says his office received a query last month from an out-of-state finance company asking advice about placing GPS devices in financed vehicles.
Lund says the letter came from a lawyer representing a finance company asking specifically whether the state would object to installation of GPS units on cars that serve as collateral. Many loans are sold and re-sold by car finance companies and banks. Lund says the letter indicated that the GPS devices would be for cars financed on the secondary market, where loan buyers could use the data to help determine whether a loan contract was a good credit risk.
"I foresee a fairly small step from that to a more immediate situation, in which the owners of the contracts are keeping an eye on the activities of consumers," he says. "Certainly it raises privacy issues. The proposal does not appear to violate any current consumer credit law administered by this office."
The lawyer, in an email exchange with Lund, argues that the use of the data would be limited and only used for credit purposes, and would be protected from other uses. But Lund is skeptical.
"If this is truly used only by the secondary market in an encrypted form in order to value contracts, that's one thing," he says. "But the first time someone learns that their every move is being tracked, there are going to be problems, and you may well see regulations at that point."
Lund is not the only one who doubts that the owners of such data would only use it for the stated purpose. Sen. Elizabeth Schneider of Orono is co-chair of the Legislature's Business, Research and Economic Development Committee.
"I think we're all going to be fooling ourselves if we believe that these finance companies are going to simply use this to determine eligibility for financing. It's nonsense," she says. "I know what they're up to, and I think they know -- that's valuable information that marketing companies want to get ahold of."
Schneider says there are marketing companies that would love to know your daily commute route, and armed with that sort of personalized data, could target you with specialized efforts to market everything from restaurants along your commute to products sold in stores you pass by every day.
Sen. Chris Rector of Thomaston, the Republican senator on the committee, agrees with Schneider that the GPS initiative sounds very invasive.
"I'd be concerned about protection of privacy of Maine citizens," he says. "And so it may well be that we'll have to take a close look at this and take some action to be certain that the privacy rights of individuals are protected."
Privacy is also the concern of the Maine Civil Liberties Union. Executive Director Shenna Bellows says the use of GPS devices to help determine credit worthiness is only the latest in a growing list of efforts to collect personal information about buying habits, from groceries to movie rentals.
"Each of us, as consumers, needs to be increasingly vigilant about companies that actively monitor our movements, whether it's on the Internet or our purchasing habits -- or, in this case apparently, where our car is parked," she says.
Maine Attorney General Janet Mills says she was not aware of the inquiry and says there are privacy interests and privacy protections outside of the consumer credit code that may afford some protections. She says she's having her staff review those laws, but says legislators may have to take action if they want to be assured that any data collected is only used for a particular purpose.