FTC sues Volkswagen over ‘deceptive’ diesel claims – USA TODAY
On Tuesday, a federal consumer watchdog sued Volkswagen, saying the company made false claims in commercials promoting its ‘Clean Diesel’ vehicles as environmentally friendly.
The Federal Trade Commission on Tuesday accused Volkswagen Group of deceiving American consumers into buying emission-spewing diesel vehicles, seeking more than $15 billion in damages in what could be one of the largest false-advertising cases in U.S. history.
The FTC filed a four-count civil complaint against Volkswagen Group in U.S. District Court in California, alleging the company falsely advertised that it was selling new “clean diesel” vehicles that were purchased by about 550,000 buyers.
The lawsuit compounds the German automaker’s legal troubles in the U.S., where it is already facing a criminal probe and numerous lawsuits after it admitted that it rigged more than half a million vehicles with software to cheat emissions regulations.
“This was an FTC case waiting to happen because they based their entire advertising campaign on this benefit,” said Linda Goldstein, chair of law firm Manatt Phelps & Phillips’ advertising, marketing and media practice, in an interview.
The FTC is pursuing “permanent injunctive relief, rescission, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief,” according to the lawsuit. Though FTC attorneys did not specify an amount, a person familiar with the case said the government is seeking more than $15 billion in damages.
“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.”
Volkswagen TV commercials, print advertisements, press releases, emails and online videos invariably promoted the company’s “clean diesel” slogan, claimed that VW diesels had low emissions and describing the cars as “environmentally-conscious,” “eco-conscious,” or “green,” according to the lawsuit.
The FTC has charged that Volkswagen deceived consumers with the advertising campaign it used to promote its supposedly “clean diesel.”
“It was a very emotionally appealing campaign,” Kelley Blue Book analyst Rebecca Lindland said in an interview. “You felt like you were a good human being. It made you feel better about buying a diesel and it also made you feel like you were buying the latest technology.”
According to the lawsuit, VW marketers studied potential diesel customers and determined that they “rationalize themselves out of their aspirations and justify buying lesser cars under the guise of being responsible.”
The company has already set aside $7 billion to pay for repair costs on the approximately 11 million vehicles globally that are affected by the emissions scandal. But analysts expect tens of billions of fines and settlements before the episode is complete.
The lawsuit was filed in the court’s Northern District of California, which is also handling the consolidated litigation from consumers seeking economic damages over the emissions violations. That could expedite what attorneys describe as a global settlement involving the various claims against Volkswagen, which corporations often prefer over years of uncertain litigation.
“Volkswagen has received the complaint and continues to cooperate with all relevant U.S. regulators, including the Federal Trade Commission,” VW said Tuesday in a statement. “Our most important priority is to find a solution to the diesel emissions matter and earn back the trust of our customers and dealers as we build a better company.”
Volkswagen diesel cars on models ranging from 2009 through 2015 are emitting harmful pollutants — namely nitrogen oxide, which can exacerbate respiratory conditions such as asthma — at rates of up to 40 times U.S. standards.
In several instances, Volkswagen marketing materials claimed that its diesel vehicles reduced nitrogen oxide emissions by up to 90%, according to the FTC.
Goldstein, the advertising lawyer, said the FTC’s “threshold for proving deception is quite low” in cases like this. For example, VW could still be held liable even if the marketers who made the ads didn’t know that the vehicles violated federal standards.
In one 2015 online video for VW’s “Diesel Old Wives’ Tale” series, an “old wife” holds a white scarf to the exhaust of a VW Golf SportWagen TDI and deems it pristine.
“See how clean it is?” the woman asks.
“Volkswagen TDI Clean Diesel: Like really clean diesel,” the ad’s tagline concluded, according to the FTC.
That video alone was viewed at least 9 million times.
Volkswagen Chief Executive Officer Martin Winterkorn is stepping down from the helm of the automaker following the company’s admission that it cheated on U.S. emissions tests.
Matthias Mueller apologizes for the emissions cheating scandal that has caused a loss of customer trust and the company to come under fire from the United States for their actions.
Kelly Jordan, USA TODAY
Federal authorities are suing Volkswagen over emissions-cheating software found in nearly 600,000 vehicles sold. A civil complaint against the German automaker has been made by the Justice Department and the Environmental Protection Agency on Monday.
U.S. dealerships reported a 25% decline in sales of Volkswagen brand vehicles in November, despite heavy discounts and a strong month for the overall auto industry.
The EPA says Volkswagen installed software to cheat on emissions tests. USA TODAY’s Chris Woodyard reports.
Volkswagen says it plans to start recalling 2.8 million diesel vehicles in Germany from January of next year and the CEO of the company has warned that workers need to be prepared for pain with a freeze to all non-essential investment.
Volkswagen’s CEO Matthias Mueller has announced the automaker will delay or cancel non-essential investments in an effort to cut costs following the company’s diesel emissions scandal.
Volkswagen’s incoming chairman says the emissions scandal could pose an “existence threatening” crisis for the company. The German carmaker has until Wednesday to present a plan to fix some 2.8 million vehicles in its home market.
The U.S. automakers’ monthly sales reports prove September to be a very good month, as sales were up by approx. 15% over all. VK was able to stay in the black despite its emissions scandal but is likely to show negative numbers in October
Harris County, Texas, where Houston is located, wants Volkswagen to pay for years of pollution in the diesel emissions scandal.
Some Portlanders who own Volkswagen vehicles are getting targeted by people who are upset over the emissions scandal the German auto company is currently embroiled in.
Volkswagen owners say they feel betrayed after leaning about the automaker’s air pollution trickery involving millions of its diesel cars. (Sept. 24)
Michael Horn, the head of the Volkswagen brand in the U.S was profusely apologetic for the diesel-emissions cheating scandal that emerged on Friday and vowed to win back the trust of the U.S. consumer.
The Environmental Protection agency ordered Volkswagen recall a half-million VW and Audi diesel cars Friday, saying the company violated clean air standards by programming on-board computers to produce phony results during emissions testing. (Sept.
Volkswagen named a new CEO Friday following discovery that it programmed cars to cheat on emissions tests. Meanwhile, it faces penalties form regulators, and a potential loss in customer trust. (Sept. 26)
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.