The Federal Trade Commission announced a settlement today 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; see fact sheet) 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; see fact sheet) 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.
This chart shows the range of approximate payments consumers would receive under the FTC Order.
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 judgement 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.
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