Firm will also pay out more than £21.5m in compensation to some 110,000 buyers
Volkswagen Financial Services (VWFS) has been fined £5.4 million by the UK’s Financial Conduct Authority (FCA) for failures over its treatment of customers in financial difficulty.
VWFS, which manages vehicle finance agreements (such as hire purchase and PCP deals) across the whole Volkswagen Group, has also agreed to pay more than £21.5m to some 110,000 customers “who may have suffered harm” because of these failings, the FCA confirmed.
A report published today notes that between 1 January 2017 and 31 July 2023 VWFS “failed to understand customers’ individual circumstances or provide support tailored to their needs”, which in some cases resulted in vulnerable customers’ cars being taken away “without [VWFS] considering other options” if they were unable to meet payments.
As a result, this “risked people being put in a worse position, particularly if they relied on their car to travel to work”. What’s more, these failings were compounded by “poor” templated and automated customer service systems.
In response to the findings, VWFS said in a statement: “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.
“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.”
Additionally, VWFS has made improvements to its training for customer service staff and communications, as well as introducing a new debt collections model, the FCA report states.
Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, 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.”
