Kia And Hyundai Agree To Settle Consumer Class-Action Lawsuit With $200 MN Over Rampant Car Thefts In US

Kia Corp and Hyundai Motors have agreed to pay a combined settlement of 200 million dollars to its customers in the US base, who have encountered car thefts due to lack of security elements in the vehicles.

The settlement is reported to cover about 9 million US car owners, and would comprise an overhead cost of 145 million dollars, the automakers and the lawyers of the affected vehicle owners exclaimed on Thursday.

The compensation would be rolled out soon so that those vehicle owners who have faced the losses may reap the benefits out of it.

Settlement By Kia & Hyundai

Hyundai and Kia are ready to compensate their clients for the losses and damaged incurred due to the rampant vehicle theft, along with increase in insurance premium, insurance deductible reimbursement among other theft- linked expenses.

The consumer settlement covers insurance-linked expenses, transportation costs for taxi or car rentals used as a replacement after the theft, and payments of 3,375 dollars concerning damage to personal property and vehicle, and 6,125 US dollars for total loss of vehicles.

The vehicle owners are also eligible for reimbursement involving costs of stolen vehicles, towing, crashed cars that were never tracked down, and payments related to fines, penalties and tickets incurred after they were robbed off their vehicle.

Making use of a method popularized on social media platforms including Tik-Tok, the Korean automakers in a bid to curb the car thefts, would freely upgrade the software of 8.3 million US vehicles that lack the anti-theft immobilizers.

Nonetheless, the brand car makers also declared that special providence of 300 US dollars would be given to those vehicle owners where security software upgrades cannot be accommodated.

The extra amount can be used for the purchase of theft prevention devices and locks for steering wheels by the plaintiffs.

Whereas, the auto company is itself ready to distribute more than 65,000 locks for the steering wheel.

Kia models which do not possess an immobilizer, yet are entitled for software upgradation include Kia Sorento, Kia Sportage and Kia Sedona.

Auto Thefts

Almost 14 car crashes and 8 fatalities had been reported in the US as YouTube and Tik Tok tutorial videos communicated how to steal cars by immobilizing the anti-theft devices, majorly those without the push-button ignitions in less than a fraction of a minute.

The Hyundai and Kia vehicles manufactured between 2011 to 2022 possess the traditional steel key ignition system of ‘insert-and-turn’, doubtlessly to cut costs; and the owners of these cars are the most affected.

By reason of the manufacturing defect, thieves had figured out a lack of anti-theft device, due to which the Kia and Hyundai cars could be stolen easily.

For the same reason, teenagers over Social Media were found to challenge each other to do it in a venture named as ‘Kia Challenge’.

Major US cities which had filed the consumer class action lawsuit against the Korean automakers include San Deigo, California; St. Louis, Missouri; Milwaukee, Wisconsin; Cleveland, Columbus, Ohio; Seattle and Baltimore.

Conclusion

A 2021 Report by Virginia-based Highway Loss Data Institute indicates that 2015 Kia and Hyundai models came out with non-resistant immobilizers, totaling to only 26 per cent of the vehicles, whereas other manufacturers offered 96 per cent of vehicles with standard immobilizer equipment.

This had an unpleasant repercussion on the consumers as sometimes it also cost them repair bills worth 10,000 dollars.

The Chief Legal Officer of the Hyundai Motor North America, Jason Erb, declared that they were happy to serve their customers with additional support after noticing a widespread and persistent criminal schemes targeting the brands.

The compensation would eventually welcome relief to the customers, and also act as a warning for car manufacturers to not to omit the basic and most integral safety feature before rolling out the cars into the market.

Hyundai Motors is the parent auto company of Kia Corp, yet both of them operate independently. Kia ranks among the largest automobile  manufacturer of South Korea, second to Hyundai.

Proofread & Published By Naveenika Chauhan