Vulnerable people who owned cars through a loan scheme with Volkswagen's finance arm had their cars confiscated with “limited to no” warning, a watchdog has ruled.
A customer told Volkswagen Finance he had attempted suicide, but the company showed a “lack of empathy”, according to the Financial Conduct Authority (FCA).
Around 110,000 customers will receive a share of the £21.5 million compensation. The FCA said VW Finance must pay for its failures.
The FCA also fined the company £5.4 million for the behavior. The company said it has since made “significant adjustments” to its business.
He added that he acknowledged his shortcomings and apologized for “any harm caused.”
According to the FCA report, VW Finance failed to engage with customers who were struggling to pay and sent them “template communications”.
Other drivers have been charged the cost of removing their car and ignored by VW Finance when trying to discuss refund options.
The FCA report is the result of case studies and analysis of VW Finance processes.
The report cites a man who spoke to the company about his divorce, anxiety and suicide attempts, but was treated in a “sarcastic” manner.
It also refers to a woman who lost her job and had her car confiscated and sold at auction after falling behind on her payments, despite repeatedly offering to work out a repayment arrangement.
After the car was repossessed, she was charged £252 for “miscellaneous charges” and an “adjustment”.
“In reality, these were repossession fees,” the FCA said.
VW Finance is the UK-based financial arm of the German automobile group Volkswagen, which also owns the car brands Audi, Skoda, Bentley, Porsche and several others.
