Hyundai and Kia are paying 200 million US dollars to around 9 million buyers in the USA after a lawsuit whose cars were stolen because of clonable keys.
The US subsidiaries of South Korean automakers Hyundai and Kia have reached an agreement to settle class-action lawsuits against owners of certain vehicles without an effective immobilizer and push-button ignition. The companies announced this on Thursday. The settlement, valued at approximately $200 million and affecting approximately nine million vehicle owners, provides cash compensation for customers who suffer loss or damage caused by vehicle theft. The prerequisite for this is that these are not already covered by the insurance. The manufacturers also want to pay for increased insurance premiums and other theft-related losses.
Thieves filmed themselves on jaunts
In 2020, security researchers discovered that thieves could use simple means to circumvent the electronic immobilizer in cars from the two manufacturers as well as from Tesla and Toyota. The cause: the encryption used in the system had serious weaknesses. Using an RFID reader, an attacker was able to read the information from a key with which the blockade for the associated car could be switched off. It was then possible to short-circuit the vehicle in a conventional way – for example with a USB cable.
A “Kia Challenge” then made the rounds on TikTok in 2022. Video makers described the theft techniques in detail and filmed themselves on jaunts. As of February 2023, the National Highway Traffic Safety Administration attributed 14 accidents and eight deaths to such actions. Individual US cities reported a significant increase in certain car thefts: Buffalo, New York state, for example, saw a 500 percent increase in Kia thefts from 2020 to 2022. In Philadelphia, Hyundai and Kia thefts increased 400 percent and 700 percent, respectively, from 2019 to 2022.
The manufacturer offers software upgrade
“We are pleased to have the opportunity to provide additional support to our owners who are affected by increasing and ongoing criminal activity against our vehicles,” said Jason Erb, General Counsel, Hyundai Motor North America. “This agreement, along with the provision of a free security software upgrade and the distribution of over 65,000 steering wheel locks, is the latest in a series of important actions” taken to serve customers, added Kia colleague John Yoon.
As part of the settlement, software upgrades will be automatically installed in conjunction with each service or maintenance appointment when the owner of an eligible vehicle visits the dealership, according to the announcement. For those customers whose cars don’t support the update, the agreement provides up to $300 in reimbursement for the purchase of various anti-theft devices.
According to the Reuters news agency, $145 million of the payout will go towards deductibles for customers whose cars were stolen. Buyers whose vehicles are totaled are eligible for up to $6,125. Owners of lightly damaged vehicles can receive a maximum of $3,375, plus costs such as replacement car rental, towing, speeding tickets, and other fees.
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