England, UK – Volkswagen Financial Services (UK) has been hit with a £5.4 million fine by the UK’s Financial Conduct Authority (FCA) for failing to treat customers in financial difficulty fairly, the regulator announced on Monday.
The financial arm of the German car giant Volkswagen will also compensate approximately 110,000 affected customers with a total of £21.5 million.
According to the FCA, between 2017 and mid-2023, Volkswagen Financial Services did not adequately consider individual customer circumstances or provide tailored support to those facing financial hardship.
This included instances where vulnerable customers had their vehicles repossessed without the company exploring alternative options, further worsening their situations, particularly for those who relied on their cars for work.
The FCA expressed concern that the firm’s practices risked leaving customers in even more precarious financial positions.
“This meant that, in some cases, Volkswagen Finance took cars away from vulnerable customers without considering other options,” the FCA stated, emphasizing that this could have disproportionately affected individuals’ livelihoods.
In response, Volkswagen Financial Services acknowledged the regulatory findings and issued a formal apology.
“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 a statement.
It added that it is concluding remediation efforts, including goodwill payments to those impacted, and expressed regret for any distress caused.
The FCA’s action comes as part of a broader regulatory effort to hold financial services firms accountable for how they handle customers experiencing financial difficulties, particularly during challenging economic times.
The financial arm of the German car giant Volkswagen will also compensate approximately 110,000 affected customers with a total of £21.5 million.
According to the FCA, between 2017 and mid-2023, Volkswagen Financial Services did not adequately consider individual customer circumstances or provide tailored support to those facing financial hardship.
This included instances where vulnerable customers had their vehicles repossessed without the company exploring alternative options, further worsening their situations, particularly for those who relied on their cars for work.
The FCA expressed concern that the firm’s practices risked leaving customers in even more precarious financial positions.
“This meant that, in some cases, Volkswagen Finance took cars away from vulnerable customers without considering other options,” the FCA stated, emphasizing that this could have disproportionately affected individuals’ livelihoods.
In response, Volkswagen Financial Services acknowledged the regulatory findings and issued a formal apology.
“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 a statement.
It added that it is concluding remediation efforts, including goodwill payments to those impacted, and expressed regret for any distress caused.
The FCA’s action comes as part of a broader regulatory effort to hold financial services firms accountable for how they handle customers experiencing financial difficulties, particularly during challenging economic times.
