Hyundai and Kia, two automotive brands produced by the same manufacturer, have agreed to settle a class-action lawsuit for $200 million, resolving claims that certain models are too easy to steal.
The issue arose nearly a year ago after a TikTok video demonstrated how to steal the vehicles using a USB cable. Since then, hundreds of cars have been stolen, resulting in injuries and property damage and making certain models almost impossible to insure.
The lawsuit claims the automakers failed to equip 2011-2022 Hyundai and Kia models with an immobilizer, a common antitheft device in modern cars that prevents most vehicles from being started unless a code is transmitted from the vehicle’s smart key.
The plaintiffs contend that if those models contained a stabilizer there never would have been a “Kia Challenge” on the social media platform and the cars would not have been targeted by thieves.
Artur, of Woodbridge, Ill., could be one of the Kia owners eligible for compensation under the settlement agreement.
"We had our 2018 Kia Optima stolen, police found it a few days later with the entire front smashed in, insurance totaled it," Artur wrote in a ConsumerAffairs review last month. "Kia refuses to help, even though they know they were selling a defective vehicle."
According to the lawsuit, in addition to the lack of an immobilizer, design flaws in the affected vehicles also allow thieves to steal them in less than 90 seconds. The plaintiffs also contend that the lack of adequate security in the steering columns allows easy access to the ignition assembly, while the ignition cylinders do not have a locking mechanism and can be easily removed with minimal force.
The settlement covers a large portion of the stolen vehicles. Attorneys for the plaintiffs say the settlement has been designed to address a number of situations faced by owners of affected vehicles, which total 9 million – 4.5 million Hyundais and 4.5 million Kias.
“The settlement will provide benefits as soon as possible to those who have suffered out-of-pocket losses due to car thefts in Hyundai and Kia cars without immobilizers,” said Steve Berman, managing partner at Hagens Berman and chair of the lead committee representing affected vehicle owners in the lawsuit. “The agreement also offers upgrades to fix the lack of immobilizer at the heart of the issue, as well as payments to those who are not eligible for the upgrade.”
Jason Erb, chief legal officer, Hyundai Motor North America, said the settlement agreement is meant to show the company’s support for customers who have suffered car thefts.
“Customer security remains a top priority, and we’re committed to continuing software upgrade installations and steering wheel lock distribution to help prevent thefts and offering insurance options through AAA for those who have had difficulty securing and sustaining coverage,” Erb said.
Kia issued a statement saying the settlement is just part of the company’s response, which also includes free security software updates and distributing over 65,000 free steering wheel locks.
Included in the settlement is compensation of up to $145 million for out-of-pocket losses. Participating plaintiffs can receive up to $6,125 if the theft of their car resulted in a total loss.
Settlement websites will soon be made available to class members for more information.