Lawyers for car owners and Hyundai said that Kia and Hyundai had agreed to pay around $200 million in settlement of a class action lawsuit accusing them of manufacturing vehicles which were especially susceptible to theft.
The settlement affects owners of approximately nine million vehicles. This comes as the country struggles with an increase in auto thefts, fueled by videos posted on TikTok or YouTube showing how easily Kia and Hyundai cars can be stolen.
In a press release, lawyers representing the affected vehicle owners stated that automakers failed in their duty to provide several models between 2011 and 2022 with immobilizers. An immobilizer is a common antitheft device which 'prevents the majority of vehicles from being started without a code transmitted from the vehicle’s smart key.
Lawyers claim that this failure led people to upload videos on the internet showing how to start engines using a USB cord or other metal objects. Other design flaws such as the easy access to ignition assemblies allowed vehicles to be stolen within 90 seconds.
Steve Berman, an attorney representing the affected vehicle owners, stated that he and his legal team were seeking a settlement to cover a wide range of losses. 'From those lucky enough not to have had their theft-prone cars stolen to those whose stolen vehicles were completely totaled due to Hyundai's and Kia's neglect.
In a press release, the automakers said that the settlement, which is awaiting the approval of a Federal Judge, could be worth around $200 million, depending on the number of customers who elect to participate. The agreement will set aside $145 million to cover owners' out-of pocket losses.
In a joint statement released on Thursday, Hyundai and Kia announced that they will also reimburse owners of insurance deductibles as well as increased insurance rates and theft-related losses. Hyundai Motors is the parent of Kia Motors, though both manufacturers are independent.
Jason Erb said, Chief Legal Officer of Hyundai North America: 'We are grateful for the opportunity to offer additional support to our owners who've been affected by criminal activity that has increased and persists against our vehicles.' Customer security is our top priority. We're committed in continuing to install software upgrades and distribute steering wheel locks to prevent thefts.
John Yoon said that in a press release, the settlement was "the latest in a series important actions" and added, "In addition to providing a FREE security software upgrade, we have distributed over 65,000 steering wheels locks."
YouTube and TikTok announced in March that they had removed several videos relating to the so-called 'Kia Challenge" in recent months.
Kia vehicles such as the Kia Sportage and Kia Sedona are eligible for the software upgrade to address the lack of immobilizer.
Attorneys for vehicle owners have said that websites for settlements will be available soon for vehicle owners.
In a report from 2021, the Highway Loss Data Institute stated that Hyundai and Kia were behind other manufacturers when it came to installing immobilizers. The institute found that in 2015, only 26 percent of Hyundai or Kia vehicles had passive immobilizers installed as standard equipment.
Hagens Berman is the law firm that represents vehicle owners. They claim that sometimes they are left with repair costs of around $10,000.
The law firm stated that 'we believe consumers who bought affected Hyundai and Kia vehicles deserve better'. The automakers were also responsible for failing to protect adequately against theft to reduce costs.