Volkswagen has been forced to pay customers £21.5m in compensation on top of a fine of £5.4m for failing to treat struggling customers fairly, including repossessing vehicles from people who had attempted suicide or were caring for sick relatives.
The UK financial regulator, the Financial Conduct Authority (FCA), said 110,000 customers had suffered detriment because of the unfair actions of Volkswagen Financial Services (VWFS), which is wholly owned by the German carmaker.
The vast majority of new cars in the UK are bought using some form of finance, and much of it is offered through “captive” companies owned by carmakers.
Such companies owned by the likes of Ford, Stellantis and Volkswagen are major UK lenders, and tend to be very profitable. VWFS provides finance across Volkswagen Group, which includes Audi, Skoda and Porsche, and made profits of £276m in 2023 while funding 400,000 vehicles worth more than £10bn in the year.
However, the FCA detailed a litany of failures by VWFS after it looked into the treatment of customers in financial difficulty. The action covers the…
