Volkswagen Finance has agreed to pay over £21.5m to a staggering 110,000 customers who may have suffered harm because of its failings. Vorsprung durch Technik means ‘progress through technology’ but Volkswagen Finance used technology to take cars away from vulnerable customers without considering other options.
Between 2017 and 2023, Volkswagen Finance failed to understand customers’ individual circumstances or to provide tailored support. Volkswagen Finance took cars away from some vulnerable customers without considering other options. Volkswagen Finance made matters by sending poor templated and automated communications.
Volkswagen Finance introduced improvements internally and a scheme to compensate affected customers which led to a reduced fine. It has also implemented a new debt collection model, one that is less likely to take away the car needed for a person to get to work and put bread on the table.
The FCA has worked with 100 lenders in the last 4 years to improve how they treat struggling customers, securing over £65m in redress for over 320,000 customers. Earlier this year, the FCA strengthened protections for borrowers by making measures it introduced during the pandemic permanent.
Therese Chambers at the FCA said…..
‘For many, a car is not a nice to have but a necessity for work or for family life. Volkswagen Finance made tough personal situations worse by failing to consider what those in difficulty might need. It is right it compensates those who suffered. This fine and redress should send clear signals to lenders that they need to properly support those in financial difficulty.’
Volkswagen Finance continues to contact affected customers with details of its redress scheme, and their customers should contact them with any questions.
