(Bloomberg) -- Volkswagen AG’s British finance unit has been fined £5.4 million ($7 million) for mistreating borrowers in difficulty, the Financial Conduct Authority said.
Volkswagen Financial Services (UK) is also paying £21.5 million in redress to around 110,000 customers who may have suffered harm because of its failings between January 2017 and July 2023, the FCA said in a statement on Monday.
“Volkswagen Finance made tough personal situations worse by failing to consider what those in difficulty might need,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA. “This fine and redress should send clear signals to lenders that they need to properly support those in financial difficulty.”
Customers who fell behind on their car payments weren’t given options to tackle their debts, and staff took a rigid approach to problems, according to the FCA’s investigation. The firm’s customer service agents “displayed a lack of empathy and professionalism during telephone calls,” for example laughing at mistakes, the regulator added.
The firm would even charge a £252 repossession fee when a car was seized “with little consideration of how these fees would be paid,” the FCA said. Staff did not consistently record complaints, meaning customers did not learn of their rights to further help.
Most of the customers who were affected by the shortcomings have already received £17.8 million in redress, according to the regulator.
“We recognise our shortcomings in these past cases and have made significant adjustments over recent years to ensure that we are always delivering the right level of service,” the company said in an emailed statement. “We are in the process of concluding our remediation efforts as we continue to provide goodwill payments to affected customers and apologise for any detriment caused.”
Read more about FCA’s work on motor finance
(Updates with company statement in final paragraph.)
©2024 Bloomberg L.P.