Kia and Hyundai pay $200 million to settle case after car thefts

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

The settlement, which affects the owners of some nine million vehicles, came as the nation battles a rise in car theft fueled in part by videos on TikTok and YouTube showing how easily Kia and Hyundai vehicles can be stolen.

Lawyers representing affected vehicle owners said in a press release that automakers failed to equip several models from 201[ads1]1 to 2022 with an immobilizer, a common anti-theft device that “prevents most vehicles from starting unless a code is transmitted from the vehicle’s smart key.”

That failure led to people creating videos online showing how to start engines using a standard USB charging cable or similar metal object, according to the lawyers. Other design flaws, such as easy access to the ignition unit, also allowed the vehicles to be stolen in less than 90 seconds, they added.

Steve Berman, an attorney representing affected vehicle owners in the lawsuit, said he and his team had tried to reach a settlement that would cover many types of losses, “from those fortunate enough to never have their theft-prone car stolen. , to those whose stolen cars were totaled due to Hyundai and Kia’s negligence.”

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

Hyundai and Kia said in a statement Thursday that they will also reimburse owners for insurance deductibles, increased insurance premiums and other theft-related losses. The 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 increasing and persistent criminal activity targeting our vehicles,” Jason Erb, chief legal officer of Hyundai Motor North America, said in a statement. “Customer safety remains a top priority and we are committed to continuing the installation of software upgrades and deployment of steering wheel locks to prevent theft.”

John Yoon, general counsel of Kia America, said in a statement that the settlement was “the latest step in a series of important actions, in addition to providing a free security software upgrade and distributing over 65,000 steering wheel locks.”

YouTube and TikTok said in March that the companies had removed several videos related to what is known as the “Kia Challenge” in recent months.

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

Lawyers for the vehicle owners said settlement websites will soon be available for affected vehicle owners.

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

Law firm Hagens Berman, which represents the vehicle owners, said they would sometimes be left with repair bills of about $10,000.

“We believe that consumers who have purchased affected Hyundai and Kia vehicles deserve better,” the law firm said. “And the responsible automakers failed to adequately protect against basic theft to cut costs.”

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