'Deceptive practices' land Volkswagen in trouble: US sues German automaker over 'clean diesel' campaign

Washington: The US 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, the world's second-largest automaker, deceived consumers by making false claims that the cars were environmentally friendly, met emissions standards and would maintain a high resale value.

The cars sold for an average price of approximately $28,000.

Deceptive practices land Volkswagen in trouble: US sues German automaker over clean diesel campaign

Volkswagen emblem. AFP

"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 percent.

In fact, the FTC's complaint said, they emit up to 40 times the legal limit of NOx, a dangerous pollutant that contributes to environmental harms and respiratory ailments.

Volkswagen Group of America, the company's US arm, said it had received the complaint and "continues to cooperate with all relevant US regulators, including the Federal Trade Commission."

"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," it said in a statement.

A US federal judge last Thursday gave Volkswagen until 21 April to come up with a plan to fix some 600,000 cars outfitted with the emissions-cheating software or get them off the roads.

Volkswagen has been engulfed in a growing scandal since US regulators announced in September the automaker had installed software known as "defeat devices" to cap the output of NOx below US 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.


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Updated Date: Mar 29, 2016 22:48:04 IST

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