TikTok 'car theft challenge' makes Hyundai and Kia pay up $200 million

Auto giants Hyundai Motor and Kia Corp have agreed to a settlement worth USD 200 million stemming in part from a TikTok 'car theft' challenge. The companies were facing a consumer class-action lawsuit. The 'car theft challenge' had led to rampant stealing of cars by exploiting loopholes in their security systems.

According to data with National Highway Traffic Safety Administration, the so-called "Kia challenge" had led to theft of hundreds of cars in the US and had also caused 14 reported crashes and eight fatalities.

What was the TikTok challenge?

The thieves going by the name 'the Kia Boyz' were posting instructional videos on YouTube and TikTok showing the viewers how to bypass the cars' security systems by using something as simple as a USB cable.

It has been reported that the thefts are easy to pull off because many Kia and Hundai cars, manufactured between 2015-19 do not have electronic immobilisers that prevent the thieves from bypassing the security system.

How many cars have been stolen?

There is no exact number known of cars that have been stolen as a direct consequence of the 'theft challenge'. However, the settlement covers about 9 million US owners and includes up to USD 145 million for out-of pocket losses for consumers who had their cars stolen, said Reuters.

Other related expenses such as car rental, taxi or other transportation costs that were not covered by insurance were reportedly also part of the settlement.

Owners can get reimbursed for towing costs and for stolen vehicles that suffered crashes or were never recovered, as well as payments for tickets or other penalties or fines incurred arising from a stolen vehicle.

What are the carmakers saying?

Hyundai and Kia said they will compensate owners "who incurred theft-related vehicle losses or damage in addition to reimbursement for insurance deductibles, increased insurance premiums, and other theft-related losses."

For customers whose vehicles cannot accommodate security software upgrades, the Korean automakers will provide up to $300 for the purchase of steering wheel locks and other theft deterrent or prevention devices.

"The settlement will provide benefits as soon as possible to those who have suffered out-of-pocket losses," said Steve Berman, a lawyer representing owners.

Is this the first time automakers are getting sued?

No, many major cities in the US have taken carmakers to the courts over thefts. These cities include St Louis, Missouri; Cleveland, Ohio; Columbus, Ohio; Milwaukee, Wisconsin; Baltimore, Seattle; and San Diego, California.

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