Volkswagen's U.K. Financial Unit Fined $7M for Unfair Treatment of Vulnerable Customers

A British financial regulator is fining Volkswagen’s U.K. financial service unit £5.4 million ($7 million) for treating vulnerable customers unfairly for much of the past decade.

The Financial Conduct Authority (FCA) announces the fine despite the automaker’s unit agreeing to pay £21.5 million ($23.3 million) in compensation to 110,000 customers affected by its actions during a period covering January 2017 to July 2023.

However, the regulator highlights the plight of vulnerable customers whose vehicles were taken away when they hit hard times without considering other options. Poorly formatted and automated communications also compounded the failings of Volkswagen Finance U.K., the regulator says.

In a statement on the authority's website, Therese Chambers, joint executive director of enforcement and market oversight, says: “For many, a car is not a nice thing 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.”

The regulator adds that Volkswagen Finance will continue to contact affected customers with details of its redress scheme.

Volkswagen Financial Services in an email to Reuters says: “We are in the process of concluding our remediation efforts as we continue to provide goodwill payments to affected customers and apologize for any detriment caused.”