IoT Liability – Who’s Responsible?

When your Internet connected baby monitor fails you probably whine.  You may complain to the manufacturer or the store where you bought it.  Or, you may just buy a new one.

But if that IoT device is your car, well, that could be a bit more complicated.

If you buy a used car and the previous owner did not wipe the phonebook from the hands free unit in the car, the buyer may have access to data that he or she should not have.

But if you wipe the data, is it really gone?  That is way less clear.  Is the data backed up in the cloud.  Is the cloud account associated with the buyer or the seller.

What if the seller had access to the car (to say unlock it or start it) from his or her smart phone?  Does the buyer know if that “connection” between the seller and the car has been severed?  How would the buyer ever know?  Maybe the seller can still see geolocation data – where the car is at any time.

What if a house had a smart thermostat?  If the seller still had access he or she could turn off the heat in the winter or turn off the AC in the summer.  There have been a number of cases where, during a divorce, the displaced spouse did mischievous things.

What if the house had a smart lock and the seller decided to unlock it?  Randomly.  What if the house was burgled as a result?

Are realtors equipped to counsel buyers about smart homes?  I doubt it.  Many realtors have a hard time using their MLS software (certainly not all of them, but this is a pretty geeky subject).

What about home inspectors?  Surely they are educated enough to warn people.  Many home inspectors are retired handymen.  That is the wrong demographic to be providing advice on the Internet of Things.

In some cases, the IoT devices are not even visible.  Like, perhaps, a connected furnace or smart water heater.

In some cases, when the seller sells the house and takes their Internet connection connection with him or her, the device, of course, will go offline.  Does that mean the device stops working or is there a fail-safe in the device?

According to the National Association of Realtors, only 15% of buyers ask about smart homes.  What if the realtor says “I don’t know if this is a smart house”?  Does the buyer demand answers?  Probably in some cases, the seller probably doesn’t even remember if the water heater is connected to the Internet and if it is, how do you change that connection.

Underwriters Laboratories is working a a UL security seal, but that process is voluntary and maybe, in 10 or 20 years that may turn into something.

In this article I am talking about big, expensive, smart devices, but the prediction is that, by 2020, there will be 20 billion devices connected to the Internet.  Most of them small – a toaster or refrigerator or baby monitor or security camera.  What if, as some people do have, there are security cameras inside the house and the buyer doesn’t change the password that the seller provides the buyer.  That isn’t too far fetched.  It works and it is too hard to figure out how to change it.  Now the seller can watch the buyer in his or her house.  No telling what the seller might see.  Or capture.  Or post online.  Or share with friends.  Think about that one for a minute.

In the mean time, it is kind of like the wild west.  You are on your own and good luck.

I am not anticipating this changing any time soon.


Information for this post came from SC Magazine.

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