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Hyundai will pay $200 million after a TikTok challenge exposed a huge security flaw

Most of the money from the settlement will go toward compensating theft victims.

REUTERS/Shannon Stapleton

Hyundai is putting a relatively quick end to a class-action lawsuit over a viral TikTok car theft challenge. The automaker has agreed to pay a settlement worth up to $200 million to compensate roughly 9 million US Hyundai and Kia owners. About $145 million is earmarked for out-of-pocket losses for customers whose cars were stolen or damaged and weren't covered by insurance. The companies also say they'll cover insurance deductibles, higher insurance premiums and other related expenses.

The settlement covers a wide range of Hyundai and Kia cars released between the 2011 and 2022 model years, including the Elantra, Santa Fe and Tucson. The 2011-2014 Genesis Coupe is also included. The marques will pay up to $6,125 per owner for the total loss of a car, and up to $3,375 for damage to the vehicle and any personal property.

The brands have already released a dealership-installed update that improves theft prevention for certain models (such as the 2017-2020 Elantra, 2015-2019 Sonata and 2020-2021 Venue) by disabling push-to-start and lengthening the alarm. Other vehicles that can receive updates will get theirs by June. As part of the settlement, Hyundai and Kia will also offer up to $300 to help drivers buy anti-theft devices. They say they've already provided "tens of thousands" of free steering wheel locks to affected customers, and have provided AAA insurance options for customers who had trouble maintaining coverage.

The "Kia Challenge" emerged in mid-2022 after "Kia Boyz" posted TikTok videos showing how they used USB cables to hot-wire many Hyundai and Kia cars without anti-theft immobilizers. Thefts of those makes surged not long after, and the National Highway Traffic Safety Administration got involved after at least 14 crashes and eight deaths were linked to the viral clips.

The settlement heads off a high-profile court battle with owners, although it won't necessarily eliminate lawsuits from cities like Cleveland, San Diego and Seattle. It also underscores the cost of security issues in the social media era — it doesn't take much for a weakness to become public knowledge.