Looking at the VW case in the rearview mirror

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The FTC’s actions against Volkswagen for false “clean diesel” claims were record-setting in size, scope, and seriousness. The defendants spent millions to pitch their cars to environmentally conscious consumers. But behind those low emissions numbers was a dirty little secret – and we do mean dirty: The defendants had cheated on the test. The cases made headlines in 2016 and 2017 and for many people, that was the end of the road. But as a Final Status Report the FTC just filed with the Court shows, the parties involved in the litigation had many more miles to travel.

Volkswagen (through its VW and Audi brands) and Porsche unlawfully marketed more than 550,000 diesel vehicles with misleading “green” claims. Actions brought by the Department of Justice, Environmental Protection Agency, California Air Resources Board, and their partners focused on the environmental consequences of the defendants’ deception. The FTC and plaintiffs’ attorneys focused on the financial injury to consumers.

The Final Status Report brings to a close the largest consumer redress program ever – and there are two particularly notable numbers.

First, under the terms of the Orders, the defendants have repaid consumers more than $9.5 billion. Furthermore, of eligible U.S. claimants, 86% who completed the claims process opted to have the defendants buy back their vehicles at a favorable pre-negotiated price (or terminate their leases early), rather than receive a modification to their car and some compensation.

Why are we mentioning the redress program several years after the cases were announced? Because the settlements were just the start of a painstaking roll-up-the-sleeves process to make sure consumers received compensation in an equitable, efficient manner. And according to the Final Status Report, “Thanks to the efforts of the parties involved with the consumer settlements – the Court, the FTC, the private bar, the independent Claims Supervisor, and Defendants themselves – this is one of the most successful consumer redress programs in history.”

These cases involved a small but devoted pit crew of FTC attorneys, economists, paralegals, and consumer education specialists, some of whom continued to work on the redress program long after the headlines faded. The FTC strives to be a “There is no I in T-E-A-M” kind of place, but the efforts on behalf of America’s consumers of three current Bureau of Consumer Protection attorneys – Jonathan Cohen, Michelle Schaefer, and Sangjoon “Simon” Han – make us particularly proud to call them our colleagues.
 

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