In a significant development, a federal judge declined to give the green light to a proposed settlement in a class-action lawsuit involving Hyundai and Kia vehicles that have been plagued by a surge in thefts. The judge's decision comes as a result of concerns over the proposed remedies, which were deemed insufficient to address the ongoing issue.
The class-action lawsuit, filed in response to a marked increase in auto thefts of 2011-2022 model year Hyundai and Kia vehicles, has been closely watched by both the automotive industry and consumers. The proposed settlement, first announced in May, carries a potential value of $200 mn and covers approximately 9 mn vehicles in the United States, as per statements from the two automakers corporations.
These vehicles have become a target for thieves due to their lack of push-button ignition and advanced anti-theft technology. Criminals have reportedly been able to steal these cars using nothing more than a screwdriver and a USB cord, leading to a surge in auto thefts across the nation.
The proposed settlement outlined two main components: cash payments to owners affected by theft-related damage and a voluntary recall to update the vehicles' theft-protection software. However, U.S. District Judge James Selna expressed reservations about the efficacy of these measures.
Judge Selna raised concerns about the accuracy and fairness of the method used to calculate the cash payments. Additionally, he questioned the adequacy of the software update in preventing future thefts. The update, introduced by Hyundai and Kia in early 2023 after security vulnerabilities were exposed on social media platforms like TikTok, was meant to address the vulnerabilities that had allowed thieves to bypass existing security measures. However, subsequent reports indicated that thefts were still occurring at an alarming rate even after the update.
The Associated Press conducted an investigation into the situation, collecting data from multiple cities across the U.S. The data revealed that in seven out of eight cities studied, police reported significant year-over-year increases in theft reports through April.
In a recent development, attorneys general from six states and the District of Columbia joined the conversation, urging Judge Selna to consider more robust solutions. Specifically, they suggested the installation of advanced antitheft technology known as engine immobilizers in all theft-prone Hyundai and Kia vehicles. They also proposed the possibility of implementing a vehicle buyback program as an alternative to the existing update and cash payment arrangement.
The decision by Judge Selna to decline approval for the current settlement sends a clear signal that the proposed remedies are inadequate in the eyes of the court. This ruling places Hyundai and Kia back at the drawing board, urging them to explore more effective and comprehensive measures to tackle the ongoing auto theft crisis affecting their vehicles.
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