Volkswagen, Porsche Repaid $9.5 Bln To Car Buyers Over ‘clean Diesel’ Issue: FTC

The Federal Trade Commission or FTC said that German carmakers Volkswagen and Porsche repaid more than $9.5 billion since 2016 to car buyers, who were deceived by “clean diesel” ad campaign.

In a filing with federal court, the regulator said the payment was made under its orders following the companies’ deceptive advertising of Volkswagens and Audis fitted with illegal emission defeat devices.

In March 2016, the FTC had filed a complaint in federal court, alleging 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. However, the cars were fitted with illegal emission defeat devices designed to mask high emissions during government tests.

The case was settled, and the companies were required to make payments to consumers that included compensation for their vehicles’ full retail value, plus all other losses they suffered because of the deception.

In the largest consumer redress program in U.S. history, set up in 2016 and 2017, the companies were to compensate purchasers and lessees of more than 550,000 deceptively marketed “clean diesel” VW and Audi cars.

The customers could choose to return their vehicle to VW or Porsche in exchange for compensation, or to get the car modified to comply with clean-air rules. More than 86 percent chose to return their car through a buyback or early lease termination, the FTC noted.

In May, a top court in Germany had ordered Volkswagen to buy back the diesel cars delivered to customers with faulty emission systems.

The emissions scandal, dating back to 2015, resulted in the ban of the diesel cars with the cheating software in the U.S. However, the company was allowed to update the software in Europe.

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