$200 Million Kia-Hyundai Settlement Would Pay Vehicle Owners, City’s Lawsuit Ongoing
Theft epidemic caused by company's negligence, plaintiffs argued.
2018 Hyundai Accent. Photo by Kevauto, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons
Kia and Hyundai have reached an approximately $200 million settlement in a class-action consumer lawsuit regarding security deficiencies in their vehicles, but a separate lawsuit in which the City of Milwaukee is a party is still ongoing.
The settlement will award cash payments to vehicle owners who have incurred theft-related losses or damage not covered by insurance. Payments include up to $6,125 for totaled vehicles and up to $3,375 for damage to the vehicle and other property. Payments will also cover other expenses related to towing, increased insurance premiums, substitute transportation costs and lost income related to the time it takes to install new theft deterrent technology. The payments are to be made from a $145 million fund.
“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 a statement. “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.”
The agreement, announced Thursday, follows a wave of vehicle thefts that started in Milwaukee in 2020 and became a nationwide trend in the past year. Many Kia and Hyundai vehicles manufactured in the past decade lack an immobilizer (key fob) that prevents the vehicle’s starting, a feature common in many new vehicles. The vulnerability is compounded by the fact that the vehicles have an ignition that can be started by breaking the steering column and using a USB cable to gain the torque to turn a metal piece. The result was millions of vehicles that can be easily stolen in less than two minutes. Kia and Hyundai made more than two-thirds of all vehicles stolen in Milwaukee in 2021.
In February, Hyundai announced a phased rollout of a free software fix to many of its vehicles that promises to largely stop the issue and Kia is now also offering the fix. It includes three notable changes, according to Hyundai: the vehicle will no longer start without a key present in the ignition; using the keyless entry fob to lock the vehicle will activate an “ignition kill” feature preventing the vehicle from starting until disabled; and the alarm is to be extended to one minute from 30 seconds. Not all vehicles will qualify for the upgrade, but the companies have pledged to provide up to $300 per owner to purchase alternative security enhancements.
Mayor Cavalier Johnson previously called the companies’ responses a “slap in the face.” Their original provision included offering steering wheel locks that the Milwaukee Police Department could freely distribute and later offering an alarm and kill switch at an estimated purchase and installation cost of $500. Council members Khalif Rainey and Milele A. Coggs called the latter offering “insulting.”
The City of Milwaukee is pursuing its own financial relief through a separate multi-jurisdictional, class-action lawsuit consisting of government agencies. Seattle-based law firm Keller Rohrback is representing the city and several other plaintiffs. MWH Law Group is supporting the Seattle firm. The city is seeking financial relief for the public safety and public works costs associated with the multi-year surge in vehicle thefts.
The new software fix is to be installed any time a vehicle is brought in for maintenance. Owners can also initiate a service appointment to expedite the upgrade.
Settlement websites where qualifying individuals can apply for reimbursement are expected to launch “soon”. The settlement covers approximately nine million vehicles according to the companies. It comes after several class-action lawsuits were consolidated into one case.
“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.
Those committing the thefts in Milwaukee were given the moniker “Kia Boyz.” The name is not a reference to a specific gang, but a social media brand for a type of theft often committed by teenagers. The stolen vehicles are often used for reckless joyriding. More than half of the thieves caught in Milwaukee were children according to an MPD report.
Hyundai owns a significant stake in Kia and the two entities partner on engineering.
“We appreciate the opportunity to provide additional support for our owners who have been impacted by increasing and persistent criminal activity targeting our vehicles,” said Jason Erb, chief legal officer, Hyundai Motor North America, in a statement.
Hyundai Vehicles Included in Settlement
- 2011-2022 Accent
- 2011-2022 Elantra
- 2013-2017 Elantra GT
- 2013-2014 Elantra Coupe
- 2011-2012 Elantra Touring
- 2011-2014 Genesis Coupe
- 2018-2022 Kona
- 2020-2021 Palisade
- 2011-2012, 2019-2022 Santa Fe
- 2013-2018, 2019 Santa Fe; Santa Fe XL
- 2013-2018 Santa Fe Sport
- 2011-2019 Sonata
- 2011-2022 Tucson
- 2012-2017, 2019-2021 Veloster
- 2020-2021 Venue
- 2011-2012 Veracruz
Kia Vehicles Included in Settlement
- 2011-2021 Forte
- 2021-2022 K5
- 2011-2020 Optima
- 2011-2021 Rio
- 2011-2021 Sedona
- 2021-2022 Seltos
- 2010-2022 Soul
- 2011-2022 Sorento
- 2011-2022 Sportage
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