The auto companies Hyundai and Kia have reached a proposed $200 million settlement to end a class-action lawsuit brought by car owners whose vehicles are easy to steal because they lack anti-theft software.
The settlement would include millions of dollars to cover out-of-pocket expenses that Kia and Hyundai owners have incurred.
Kia and Hyundai faced a swell of lawsuits alleging that the companies left common anti-theft technology out of their vehicles in order to save money. The automakers did not install vehicle immobilizers in many models from 2011 through 2022, making it possible for the cars to be stolen using items as simple as a USB cord and a screwdriver.
Immobilizers are a common security measure that prevent vehicles from moving unless the ignition key transmits a signal to the car. The technology was developed in response to thieves “hotwiring” cars by bypassing the ignition switch.
Because many Kia and Hyundai models did not have immobilizers, viral “Kia Challenge” TikTok videos began appearing on social media showing how to steal the vehicles, resulting in a spike in thefts.
The class-action lawsuit also alleged that the affected cars have inadequate security in the steering columns, allowing access to the ignition assembly with little effort.
Class-action lawsuits filed nationwide were consolidated into multidistrict litigation against the automakers.
The proposed settlement comes days after the city of Baltimore sued Kia and Hyundai over increased police resources needed to respond to the surge in vehicle thefts.
The city filed the complaint last week in U.S. District Court in Baltimore. St. Louis, Cleveland, San Diego, Milwaukee and Seattle are among the other cities that have also sued Kia and Hyundai over the issue.
Ebony Thompson, Baltimore’s acting city solicitor, said the proposed class-action settlement with vehicle owners would not end the city’s lawsuit.
“We are glad to see these companies begin to accept responsibility for the problems caused when they put profits over the public, and will continue to seek to hold them fully accountable,” Thompson said.
Lawyers at Hagens Berman; Baron & Budd; FeganScott; and Humphrey, Farrington & McClain were appointed lead class counsel in the class-action lawsuit. The group announced the proposed settlement this week.
“Our goal in finalizing this settlement was to leave no one in the dark,” said Steve Berman, managing partner at Hagens Berman.
“The owners of these cars have experienced enough upset, and we worked to achieve a settlement that covers many types of losses – from those who were lucky enough to have never had their theft-prone car stolen, to those whose stolen cars were totaled completely due to Hyundai and Kia’s negligence.”
A total of 9 million vehicles are affected, the attorneys said. Up to $145 million of the settlement will go toward covering out-of-pocket expenses faced by the owners of affected vehicles, including total losses, damage to vehicles, towing costs, and rental car or public transit payments.
Hyundai and Kia have also offered free software upgrades to address the lack of an immobilizer in some affected cars. Members of the class can also request reimbursement for lost income or childcare expenses they incurred when they had the software upgrade installed.
For models that cannot receive the upgrade, vehicle owners could be reimbursed up to $300 to install anti-theft systems, buy a steering wheel lock or other modifications.
“We believe this settlement offers comprehensive, welcome relief for the class that will serve as a lesson to automakers to not overlook such integral, basic safety features,” said Roland Tellis of Baron & Budd.