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VW Finance has been asked to pay customers over £21m for unfair treatment

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VW Finance has been asked to pay customers over £21m for unfair treatment | Top Gear

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The Financial Conduct Authority concludes that VWFS shouldn't have treated some customers unfairly

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VW Finance has been asked to pay customers over £21m for unfair treatment

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The Financial Conduct Authority concludes that VWFS shouldn't have treated some customers unfairly

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The Financial Conduct Authority concludes that VWFS shouldn't have treated some customers unfairly

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VW Finance has been asked to pay customers over £21m for unfair treatment

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VW Finance has been asked to pay customers over £21m for unfair treatment

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VW Finance has been asked to pay customers over £21m for unfair treatment

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The Financial Conduct Authority concludes that VWFS shouldn't have treated some customers unfairly

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The Financial Conduct Authority (FCA) has fined Volkswagen Finance for failing to treat its customers in financial difficulty fairly. Not only has the regulator fined the lender over £5 million, but it’s also insisted the 110,000 drivers affected receive a total of £21 million in compensation. Oh dear.

What happened? The FCA didn’t think Volkswagen Financial Services Ltd (VWFS) was as fair as it should have been in resolving repayment issues for some vulnerable customers when they called to say they were having money problems.

To recap, VWFS is the outfit that provides the credit agreements for new purchases on Porsche, Skoda, Seat and VW models. In a 13-month investigation, the FCA found between 2017-2023, when folks were already struggling, VW Finance repossessed cars as per its terms and conditions.

Despite being contractually able to do this, businesses operating as financiers aren’t entitled to put customers in a worse position when informed of their financial difficulties. They can use discretion, and that’s basically what the FCA reckons VW Finance should have done. Plus, you'll probably have noticed those dates covered the time we were all dealing with the Covid pandemic.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, 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."

The FCA wants £5,397,600 from VWFS by way of a fine (a figure that includes a 30 per cent discount because VW Finance cooperated, so the FCA tells us). Volkswagen Finance agreed to pay the 110,000 customers affected compensation, too, to the tune of £21.5m – almost £200 each, if shared evenly.

The FCA has also insisted on more customer training for VWFS employees and a change to the lender's debt collections model. VW Finance is in the process of contacting the customers in question, though anyone with questions can contact it directly.

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The Financial Conduct Authority (FCA) has fined Volkswagen Finance for failing to treat its customers in financial difficulty fairly. Not only has the regulator fined the lender over £5 million, but it’s also insisted the 110,000 drivers affected receive a total of £21 million in compensation. Oh dear.

What happened? The FCA didn’t think Volkswagen Financial Services Ltd (VWFS) was as fair as it should have been in resolving repayment issues for some vulnerable customers when they called to say they were having money problems.

To recap, VWFS is the outfit that provides the credit agreements for new purchases on Porsche, Skoda, Seat and VW models. In a 13-month investigation, the FCA found between 2017-2023, when folks were already struggling, VW Finance repossessed cars as per its terms and conditions.

Despite being contractually able to do this, businesses operating as financiers aren’t entitled to put customers in a worse position when informed of their financial difficulties. They can use discretion, and that’s basically what the FCA reckons VW Finance should have done. Plus, you'll probably have noticed those dates covered the time we were all dealing with the Covid pandemic.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, 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."

The FCA wants £5,397,600 from VWFS by way of a fine (a figure that includes a 30 per cent discount because VW Finance cooperated, so the FCA tells us). Volkswagen Finance agreed to pay the 110,000 customers affected compensation, too, to the tune of £21.5m – almost £200 each, if shared evenly.

The FCA has also insisted on more customer training for VWFS employees and a change to the lender's debt collections model. VW Finance is in the process of contacting the customers in question, though anyone with questions can contact it directly.

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The Financial Conduct Authority concludes that VWFS shouldn't have treated some customers unfairly

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