Kia and Hyundai pay $200 million to settle auto theft lawsuit

Kia and Hyundai have agreed to pay nearly $200 million to settle a class-action lawsuit accusing the manufacturers of producing cars that are particularly vulnerable to theft, attorneys for the car owners and manufacturers said Thursday.

The settlement, which affects owners of about nine million vehicles, came as the nation grapples with a surge in car thefts fueled in part by videos on TikTok and YouTube that show the ease with which Kia and Hyundai vehicles can be stolen.

Attorneys representing the affected car owners said in a press release that the automakers failed to equip several models from 2011 through 2022 with an immobilizer, a common anti-theft device that “prevents most vehicles from being started unless a code is sent from the vehicle’s smart key.”

That failure led to people making videos online showing how they could start the engines using a common USB charging cord or similar metal object, according to the attorneys. They added that other design flaws, such as easy access to the ignition assembly, also allowed vehicles to be stolen in less than 90 seconds.

Steve Berman, the attorney representing the aggrieved auto owners in the lawsuit, said he and his team sought a settlement that would cover many types of losses, “from those who were lucky enough to never have their theft-prone vehicle stolen, to those whose stolen vehicles were collected in full.” Because of the negligence of Hyundai and Kia.

The automakers said in a statement that the settlement, pending approval by a federal judge, could be valued at nearly $200 million, “depending on how many customers choose to participate.” They said the agreement would set aside up to $145 million for personal losses incurred by the owners.

Hyundai and Kia said in a statement Thursday that they will also compensate owners for insurance deductions, increased premiums and other theft-related losses. Manufacturers operate independently, but Hyundai is the parent company of Kia Motors.

“We appreciate the opportunity to provide additional support to our owners who have been affected by the increased and ongoing criminal activity targeting our vehicles,” Jason Earp, Hyundai Motor North America’s chief legal officer, said in a statement. “Customer safety remains a top priority, and we are committed to continuing software upgrade installations and steering wheel lock distribution to help prevent thefts.”

John Yun, Kia America’s chief legal officer, said in a statement that the settlement was “the latest step in a series of important actions, in addition to the provision of a free security software upgrade and the distribution of more than 65,000 steering wheel locks.”

YouTube and TikTok said in March that the two companies had removed several videos related to the so-called “Kia Challenge” in recent months.

Vehicles eligible for the software upgrade that address the lack of an immobilizer include several Kia models, such as the Kia Sportage, Kia Sorento, and Kia Sedona.

Attorneys for the car owners said settlement sites will soon be available to affected vehicle owners.

The Highway Loss Data Institute said in a 2021 report that Hyundai and Kia have lagged behind other manufacturers in installing immobilizers. In 2015, the institute found that 26 percent of Hyundai and Kia vehicle series had passive immobilizers as standard equipment, compared to 96 percent of other manufacturers.

Sometimes they may be left with repair bills of about $10,000, said the law firm Hagens Berman, which represents the car owners.

“We believe that consumers who purchased affected Hyundai and Kia vehicles deserve better,” the law firm said. “Responsible automakers fail to provide adequate protection against basic theft in order to reduce costs.”

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