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The FCA has fined Volkswagen Financial Services UK (Volkswagen Finance) £5,397,600 for ‘failing to treat its customers in financial difficulty fairly’. This issue was uncovered during the FCA’s supervisory work to assess how lenders support borrowers in difficulty.
Volkswagen Finance has agreed to pay over £21.5m in redress to around 110,000 customers.
Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, 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.”
Between 1 January 2017 and 31 July 2023, Volkswagen Finance failed to understand customers’ individual circumstances or to provide support tailored to their needs.
These failings were ‘compounded by poor templated and automated communications’.
The FCA’s work resulted in Volkswagen Finance setting up a redress scheme. It has made improvements to its training for customer service staff and communications and introduced a new debt collections model.