Volkswagen Finance to pay £21.5m compensation for failing vulnerable customers

The Financial Conduct Authority (FCA) found that Volkswagen Financial Services (UK) Limited failed to understand customers’ individual circumstances or to provide support tailored to their needs between 1 January 2017 and 31 July 2023.

In some cases, Volkswagen Finance took cars away from vulnerable customers without considering other options. The company’s failings were compounded by poor templated and automated communications.

The FCA’s work resulted in Volkswagen Finance setting up a redress scheme to compensate affected customers. It has made improvements to its training for customer service staff and communications. It has also introduced a new debt collection model.

Therese Chambers, joint executive director of enforcement and market oversight, said: “For many, a car is not a nice to have but a necessity for work or for family life. Volkswagen Finance made tough personal situations worse by failing to consider what those in difficulty might need.

“It is right it compensates those who suffered. This fine and redress should send clear signals to lenders that they need to properly support those in financial difficulty.”

This enforcement case was opened following the FCA’s supervisory work. The enforcement investigation took a total of 13 months to complete, compared to an average of 42 months for investigations closed in 2023/24.