What is in this article?:
- VW Roundup: US Sues for Deceptive 'Clean Diesel' Campaign
- VW Could Skip 2015 Dividend Payout
Normally generous with shareholders, Volkswagen will also reportedly skip dividend payments in the wake of its emission scandal, and recall more than 5,000 American e-Golfs to fix batteries.
WASHINGTON, D.C. — The U.S. government filed suit against Volkswagen on Tuesday, charging the German automaker deceived American consumers by promoting supposedly “clean diesel” vehicles that were actually fitted with illegal pollution-cheating devices.
The Federal Trade Commission said it is seeking a federal court order requiring Volkswagen to compensate consumers who bought or leased more than 550,000 affected VW and Audi vehicles between late 2008 and late 2015, as well as an injunction to prevent Volkswagen from using the cheating devices again.
In its complaint filed in federal court, the FTC alleged that during this seven-year period Volkswagen deceived consumers by making 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. “The hidden defeat devices will significantly reduce the vehicles’ resale value, the FTC said.
“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,” FTC chairwoman Edith Ramirez said in a statement. “Our lawsuit seeks compensation for the consumers who bought affected cars based on Volkswagen’s deceptive and unfair practices.”
The consumer protection and antitrust federal agency said Volkswagen’s promotional materials repeatedly claimed that the vehicles have lower emissions than gasoline cars, and reduce nitrogen oxides (NOx) emission by 90%. In fact, the FTC’s complaint said, they emit up to 4,000% more than the legal limit of NOx, a dangerous pollutant that contributes to environmental harms and respiratory ailments.
Volkswagen has been engulfed in a growing scandal since U.S. regulators announced in September the automaker had installed software, known as a “defeat device,” that limits the output of NOx to U.S. legal limits during emissions test by regulators.
But when the vehicles are in actual use, the software allows them to spew poisonous gases well above the permitted levels, giving the cars better acceleration and fuel economy.
Volkswagen subsequently acknowledged it had installed emissions-cheating software in 11 million diesel cars worldwide.
In addition to still-unquantifiable regulatory fines from several countries, VW is facing a slew of lawsuits from angry owners of the diesel cars — notably in the United States and Germany — and from shareholders seeking damages for the massive loss in the value of their stocks since September.