At 10.17 hours on 30 Sep 1939, U-3 surfaced beneath the unescorted and neutral Vendia (Master P. Lund) and ordered her to stop by signal flags about 35 miles northwest of Hanstholm. Her lookouts had difficulties to see the U-boat at first as it was approaching from astern on a parallel course in a patch of sunlight and could not see what the flags meant, but then stopped the engines when the U-boat fired a few warning shots with a machine gun at 10.40 hours. However, what happened next is disputed. According to Schepke, the ship stopped slowly and nothing more occurred until it suddenly began to move again and turned hard towards U-3 in an attempt to ram at 11.24 hours. Schepke quickly fired a badly aimed torpedo that hit the Vendia aft and broke off the stern which sank immediately. The wreck sank after an explosion at 12.05 hours. Six survivors, among them the master, were picked up by the Germans after about 45 minutes and shortly thereafter transferred to the Danish steam merchant Svava for repatriation.

A Danish maritime court later investigated the claims of the German naval authorities that this neutral Danish ship had attempted to ram the U-boat during an examination according to the prize rules. The master and all other survivors denied that they had deliberately tried to ram the U-boat as they had no reason to take any hostile action against it. The master stated that he had purposely ordered the man at the wheel to keep the ship on course while the Vendia stopped, but due to high seas and wind the bow began to swing southwards until the vessel lay presumably between southwest and west-southwest while the stem of the U-boat pointed straight at her port quarter at a distance of about 150 meters. He then shouted in German if they should launch a boat, but received no answer before the ship was suddenly torpedoed. No orders had been given to the man at the wheel and the engine room telegraph was not used. Furthermore the master had signed a piece of paper with the name of the vessel and its tonnage, but this paper was later presented as evidence with a text in German that he had tried to ram the U-boat. The Danish Foreign Ministry filed a formal protest against the sinking to the German embassy in 1939.