FTC Seeks Court Order Against Volkswagen for Deceptive Advertising
March 29, 2016
WASHINGTON, D.C. — The Federal Trade Commission is seeking a court order against Volkswagen Group of America Inc. that would require the manufacturer to compensate American consumers who bought or leased a vehicle equipped with emissions cheat software between late 2008 and late 2015.
In a complaint filed in federal court, the FTC charged the automaker with deceiving consumers over that seven-year period, noting that it sold or leased more than 550,000 diesel cars based on false claims that the cars were low-emission, environmentally friendly, met emissions standards and would maintain a high resale value. The cars sold for an average price of approximately $28,000.
“For years Volkswagen’s ads touted the company’s ‘Clean Diesel’ cars even though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests,” said FTC Chairwoman Edith Ramirez. “Our lawsuit seeks compensation for the consumers who bought affected cars based on Volkswagen’s deceptive and unfair practices.”
Last year, Volkswagen was was given until March 24, 2016, to provide a detailed plan of how it would recall 600,000 of its diesel-powered vehicles equipped with emissions cheat software — a deadline that passed without an approved solution. But because the vehicle OEM has made “substantial progress,” U.S. District Judge Charles Breyer in San Francisco has extended that deadline to April 21, according to Bloomberg.
The cost of buying back the affected vehicles could cost $9.4 billion, the media outlet estimated. A Kelley Blue Book analyst put the amount at $7.3 million.
“Volkswagen can't move past its diesel challenge until a solution is confirmed for all cars that don't meet current standard," said Karl Brauer, senior analyst at Kelley Blue Book. "While any fix for these vehicles will be complex and costly, every delay extends the timeframe to get past this scandal and on to rebuilding the brand."
The FTC is also seeking an injunction to prevent Volkswagen from cheating government tests again.