Markets Wired

In a final summary filed in federal court today, the Federal Trade Commission reported that Volkswagen and Porsche repaid a total of more than $9.5 billion since 2016 to car buyers under the FTC’s orders stemming from the companies’ deceptive “clean diesel” advertising of VWs and Audis fitted with illegal emission defeat devices.

Given a choice between returning their vehicle to VW or Porsche in exchange for compensation, or having the car modified to comply with clean-air rules, more than 86 percent of those who concluded the claims process chose to return their car through a buyback or early lease termination, the FTC noted in a Final Status Report filed with the U.S. District Court for the Northern District of California. 

“Most important, the FTC orders and related private class settlements provided redress sufficient to compensate consumers fully,” the FTC said in the report.

The FTC’s final report to the court marks the end of the largest consumer redress program in U.S. history, set up in 2016 and 2017 to compensate purchasers and lessees of more than 550,000 deceptively marketed “clean diesel” VW and Audi cars. In a complaint filed in federal court in March 2016, the FTC alleged that Volkswagen’s seven-year ad campaign was based on false claims that the cars were low-emission, environmentally friendly, met emissions standards, and would maintain a high resale value. In reality, however, the cars were fitted with illegal emission defeat devices designed to mask high emissions during government tests.

The FTC orders settling the case, approved in conjunction with class action plaintiffs, required payments to consumers that included compensation for their vehicles’ full retail value, plus all other losses they suffered because of the deception, such as time spent shopping for new vehicles, sales taxes and registration fees, and the additional amount consumers paid for a low-emissions vehicle feature. 

In addition to the FTC order on consumer redress, the Department of Justice and the Environmental Protection Agency obtained court orders providing billions more for environmental relief.

In the final report, the FTC reported to the court that despite the large volume of claims, Volkswagen had “successfully managed the settlement administration process effectively,” working together with a court-appointed independent claims supervisor tasked with monitoring compliance.