US FTC sues Volkswagen over deceptive diesel advertising

30 March 2016

The US Federal Trade Commission (FTC) has charged that Volkswagen Group of America deceived consumers with the advertising campaign it used to promote its supposedly “clean diesel” VWs and Audis, which Volkswagen fitted with illegal control strategy designed to defeat regulatory emission tests. The FTC is seeking a court order requiring Volkswagen to compensate US consumers who bought or leased an affected vehicle between late 2008 and late 2015, as well as an injunction to prevent Volkswagen from engaging in this type of conduct again.

In a complaint filed in federal court in San Francisco, the FTC alleges that during this seven-year period Volkswagen deceived consumers by selling or leasing 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.”

The FTC filing doesn’t name a specific figure for the damages. However, the FTC's enforcement division said that Volkswagen could be potentially liable for “billions” of dollars in consumer compensation—either in the form of delivering a way to fix the vehicles or buying them back, according to The Washington Post.

Volkswagen has been in talks with the US EPA and the US DOJ regarding the recall of the affected vehicles and the settlement, but no agreement has yet been reached. In January, the DOJ filed a lawsuit that accuses the company of violating air-pollution laws with the control software strategy.

Source: US FTC