Home » Class Action Reporter » VOLKSWAGEN GROUP: Reaches Settlement with FTC in Emissions Case

VOLKSWAGEN GROUP: Reaches Settlement with FTC in Emissions Case

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The Federal Trade Commission announced a settlement on Feb. 1 that
requires Volkswagen Group of America to fully compensate consumers
who purchased 3.0-liter TDI diesel vehicles through a combination
of repairs, additional monetary compensation, and buybacks for
certain models.

Under the federal court order, owners of older vehicles (model
years 2009-2012) will be able to sell their car back to Volkswagen
at favorable prices and obtain full compensation for their losses.
Consumers are eligible to receive approximately $26,000 to $58,000
for a buyback, depending on the model, mileage, and trim of the
car. These owners can also opt to keep their cars and receive an
emissions modification that would improve their vehicle’s
emissions, if a modification is approved by the Environmental
Protection Agency and the California Air Resources Board.
Consumers receiving an emissions modification will also receive
monetary compensation.

For owners and lessees of newer vehicles (model years 2013-2016)
Volkswagen is expected to obtain regulatory approval for an
emissions repair that brings the cars into full compliance with
originally certified emission standards and does not materially
reduce the performance of the vehicle. If Volkswagen obtains EPA
and CARB approval within the timeframe in the FTC Order, consumers
will receive this repair and additional monetary compensation
ranging from approximately $8,500 to $17,600. This means
consumers with newer vehicles will receive the car they thought
they purchased — plus a substantial additional payment. If an
emissions repair is not available under the timeframe in the FTC
order, then Volkswagen must offer to buy back those models and
provide lease terminations.

Certain consumers who leased an affected vehicle are eligible for
substantial compensation. Options for lessees vary based on make,
model, model year, and the availability of approved emissions
modifications or repairs. Certain owners who sold their TDI
vehicles after the Volkswagen defeat device issue became public
are also eligible for compensation.

The order will return more than a billion dollars to consumers,
with the total amount depending on future events. If no emissions
repair is approved and if the company must therefore offer
buybacks for all 3.0-liter TDI models, Volkswagen may have to pay
as much as the full $4 billion judgment reflected in the order.
If an emissions repair is approved, the Commission expects
consumers to receive in excess of $1.25 billion from the 3.0-liter
vehicle settlement. This amount includes a contribution from
Bosch, which manufactured the defeat device. The Commission
previously obtained a $10 billion judgment to compensate the
larger group of consumers who had 2.0-liter TDI Volkswagen cars.
Under the FTC settlement, Volkswagen also will pay the cost of
administering the entire settlement program, including vehicle
repairs, notifications, and other logistics.

The FTC order also includes generous loan forgiveness provisions
for consumers eligible for buybacks, additional limited warranties
and lemon law-type protections for consumers eligible to receive
emissions modifications or repairs, special protections for those
serving in the armed forces, and special protections for consumers
in rural areas who may be far from the nearest dealer. The order
also requires an independent, court-appointed claims supervisor to
monitor Volkswagen’s compliance with stringent claims process
deadlines.

The FTC sued Volkswagen in March, charging that the company
deceived consumers with its advertising campaign used to promote
its supposedly “Clean Diesel” Volkswagens and Audis, which falsely
claimed that the cars were low-emission, environmentally friendly,
met emissions standards, and would maintain a high resale value.

This order completes the FTC’s case against Volkswagen by ensuring
that all consumers who purchased a TDI diesel engine vehicle will
be fully compensated for their losses. In a companion matter,
hundreds of private actions have submitted a proposed class action
settlement consistent with the FTC’s order. A related settlement
with the Department of Justice (DOJ) and Environmental Protection
Agency (EPA) resolves the Clean Air Act violations those agencies
alleged.

Consumers can determine if they are eligible for compensation, and
if so for how much at VWCourtSettlement.com and
AudiCourtSettlement.com. They can also use these websites to
submit claims, make appointments, and receive updates. Monetary
relief will become available when the DOJ/EPA and private
settlements become final.

The Commission vote approving the proposed stipulated order was 3-
0. It is subject to court approval. The FTC filed the proposed
stipulated order in the U.S. District Court for the Northern
District of California.

NOTE: Stipulated orders have the force of law when approved and
signed by the District Court judge.

The Federal Trade Commission works to promote competition, and
protect and educate consumers. You can learn more about consumer
topics and file a consumer complaint online or by calling 1-877-
FTC-HELP (382-4357).