Vulnerable customers had VW cars taken away

Vulnerable people who owned cars through a loan scheme with Volkswagen's finance arm had them taken away with "limited, if any" warning, a watchdog has ruled.

One customer told Volkswagen Finance he had tried to take his own life but the firm showed "a lack of empathy", according to the Financial Conduct Authority (FCA).

Around 110,000 customers will get a share of the £21.5m compensation the FCA said VW Finance must pay for its failures.

The FCA has also fined the firm £5.4m for the behaviour. The company said it had made "significant adjustments" to its business since.

It added it recognised its shortcomings and apologised for "any detriment caused".

According to the FCA's report, VW Finance failed to engage with customers who were struggling to pay and sent them "templated communications".

Other drivers were charged the cost of taking their cars away and ignored by VW Finance when they tried to discuss repayment options.

The FCA's report was the result of speaking to case studies and analysing VW Finance's processes.

The report cites one man who told the company about his divorce, anxiety and attempts to take his own life, but was treated "sarcastically".

It also refers to a woman who lost her job and had her car taken away and sold at auction after falling behind on the payments, despite offering multiple times to find a repayment arrangement.

After the car was repossessed, she was charged £252 for "sundry debit” and an “adjustment”.

"In actual fact, this was a repossession fee," the FCA said.

VW Finance is the UK-based finance arm of the wider German car group Volkswagen, which also owns car brands Audi, Skoda, Bentley, Porsche and serval others.