VW Required to Repurchase or Fix Falsely-Marketed Diesel Vehicles, Provide Billions of Dollars in Additional Restitution to States, Federal Government and Car Owners
SALT LAKE CITY June 28, 2016 – After months of intense negotiations, Attorney General Sean Reyes today announced a series of state and federal settlements that require Volkswagen AG and its related entities to make payments and take additional remedial action for consumers that will cost the automaker an estimated $15.2 billion nationwide. Today’s coordinated settlements resolve consumer protection claims raised by a multistate coalition of over forty state Attorneys General against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. – collectively referred to as Volkswagen. They also resolve actions against Volkswagen brought by the United States Environmental Protection Agency (EPA) and Department of Justice (DOJ), the Federal Trade Commission (FTC), and car owners in private class action suits.
“As a state, we are extremely pleased with the result of these settlement agreements. While each settlement addressed a critical issue needing resolution, our foremost concern was making things right for consumers. We believe every Utahan who purchased a defective vehicle from Volkswagen will be justly compensated based on the negotiated remedies. It remains a top priority of my office to see that we vigorously protect consumers and obtain justice if they are harmed by bad business practices or fraud,” said Attorney General Sean D. Reyes. “On a national level, collaboration between federal agencies, states and class action plaintiffs was crucial in this case. On a local level, leadership from Governor Herbert was critical. Executive Director Francine Giani and the Utah Department of Commerce are the lead agency for civil consumer protection issues and they played a pivotal role in opting Utah into these monumental settlements. We also recognize Director Alan Matheson and the Utah Department of Environmental Quality as well as County and District Attorneys and Commissioners across our state for their support in this case.
“Once confirmed by the court, the first settlement of approximately $10 billion will require Volkswagen to pay each affected customer between $5,000 and $10,000 in restitution in addition to either fixing the car or buying it back at the pre-incident car value. This equates to a minimum statewide reimbursement of $40 to $80 million disbursed to 7,877 Utah car owners. The next settlement obligates Volkswagen to pay approximately $2.7 billion to an environmental fund for mitigation projects nationwide, including an estimated $32 million for Utah. Another requirement is that Volkswagen outlay an additional $2 billion for zero emission technology development. The final settlement for civil penalties dictates payments of over $1,000 per car, $500 million nationally and about $8 million to Utah. Both the $10 billion buyback and the $2.7 billion in environmental mitigation apply only to 2.0 liter vehicles. Negotiations are ongoing for a future settlement on 3.0 liter autos.”
“I commend Attorney General Sean Reyes and his office for their hard work in securing this momentous Volkswagen settlement on behalf of the Department of Commerce and the Department of Environmental Quality. Utah consumers who were deceived by Volkswagen’s deceptive diesel marketing and manufacturing will now receive monetary relief that they rightly deserve,” stated Governor Gary R. Herbert, “This settlement agreement with Volkswagen is a strong reminder that Utah is a great state for business, and that our state government continues to protect the rights of consumers, holding all industries to high standards.”
The investigation by the state attorneys general confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States equipped with “defeat device” software intended to circumvent applicable emissions standards for certain air pollutants and actively concealed the existence of the defeat device from regulators and the public. Volkswagen made false statements to consumers in their marketing and advertising, misrepresenting the cars as environmentally friendly or “green” and that the cars were compliant with federal and state emissions standards, when, in fact, Volkswagen knew the vehicles emitted harmful oxides of nitrogen (NOx) at rates many times higher than the law permitted.
Under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model year 2009 through 2015 listed in the chart below at a maximum cost of just over $10 billion. This includes 7,877 vehicles in Utah.
Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 and a choice between:
The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and sellers after September 18, 2015 when the emissions-cheating scandal was disclosed (50 percent of the restitution available to owners). Additional components of today’s settlements include:
Volkswagen will also pay $20 million to the states for their costs in investigating this matter and to establish a fund that state attorneys general can utilize for future training and initiatives, including investigations concerning emissions violations, automobile compliance, and consumer protection.
2.0 Liter Diesel Models
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