Clean diesel ads proving not so clean for VW

VW TDI Clean Diesel EngineFor quite some time, Volkswagen (“VW”) advertised its TDI “clean diesel offerings” as, “Like really clean diesel.”  However, we all now know the truth about VW’s ads regarding its clean diesel cars, which is that their ads simply do not stand up to any kind of scrutiny.  And now the FTC has decided to enter the fray against VW, suing the car manufacturer over its clean diesel advertising.

FTC Sues VW Over Clean Diesel Ads

According to the FTC’s press release, “[t]he Federal Trade Commission has charged Volkswagen Group of America, Inc. deceived consumers with the advertising campaign it used to promote its supposedly ‘clean diesel VWs and Audis, which Volkswagen fitted with illegal emission defeat devices designed to mask high emissions during government tests.”  The FTC is seeking as part of the suit a court order that would require VW “to compensate American consumers who bought or leased an affected vehicle between late 2008 and late 2015.”  The FTC also seeks an injunction against VW, which would prohibit VW from engaging in the type of conduct alleged in the complaint in the future.

The FTC’s complaint, filed in federal court, alleges that VW deceived consumers based upon false claims that their cars were “low-emission, environmentally friendly, met emissions standards and would maintain a high resale value.”  The FTC says the FTC sold or leased more than 550,000 clean diesel cars, at around $28,000 a car, during the approximately seven years it allegedly deceived consumers about the true nature of their clean diesel cars.

“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.”

FTC Says VW Falsely Claimed Clean Diesel Cars Were Low-Emission, Environmentally Friendly, and Would Maintain High Resale Value

The FTC says that VW promoted its clean diesel cars through a high-profile ad campaign, which included commercials during the Super Bowl, online social media advertising, and print advertising.  The ads were often targeted to “environmentally-conscious” consumers, the FTC’s complaint sets forth.  For example, the VW ads over-and-over claimed that its clean diesel cars had low emissions, including that the cars reduce nitrogen oxides (NOx) emissions by 90%, and that the clean diesel cars have fewer such emissions that gasoline cars.  However, the FTC’s complaint states that VW’s clean diesel cars emit up to 4,000% more than the legal limit of NOx.

The FTC also alleges that VW claimed that its clean diesel cars met “stringent emission requirements,” were “50-state compliant,” and would maintain a high resale value.  The FTC says those claims were false because without the illegally installed software in VW’s clean diesel cars, the cars would not have passed federal emissions standards.  Similarly, the illegally installed devices, which are a hidden defect according to the FTC, will reduce the vehicle’s resale value.

The affected VW clean diesel vehicles include 2009 through 2015 Volkswagen TDI diesel models of Jettas, Passats, and Touareg SUVs, as well as TDI Audi models.  The suggested sale prices for the affected vehicles ranged from approximately $22,000 for the least-expensive Volkswagen model with a 2.0-liter engine to approximately $125,000 for the most-expensive Audi model with 3.0-liter engine.

VW May Have to Write Large Checks Before it is Over

If the FTC were successful in going after VW for their alleged lease or sale of more than 580,000 clean diesel cars, VW would stand to lose an eye-popping $16.24 billion an article from Insider Car News reports.  However, the FTC will unlikely be able to recover that amount, but, even still, any number the FTC is able to recover will certainly have a significant number of zeros attached to it, the article says.

The federal judge overseeing the consolidated litigation has reportedly pushed VW to strike a quick deal with consumers, and has given VW until April 21, 2016 “to come up with a concrete proposal on how it plans to fix the affected vehicles,” the Wall Street Journal has said.  VW has responded that it “continues to cooperate with all relevant U.S. regulators” and that the company’s “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.”

The Hits Just Keep on Coming for VW

The FTC’s suit against VW aimed at the car manufacturer’s clean diesel ads is just another hit the company has taken as it relates to the fallout from the alleged clean diesel scandal.  The U.S. DOJ sued VW in January 2016, alleging that VW violated the federal clean-air law by selling clean diesel cars with the illegal software that allowed the VW clean diesel cars to pollute more on the road than would be shown on any emissions test.

In addition to the DOJ suit, VW has been named in more than 450 class-action lawsuits, and some VW executives could even face charges.  Furthermore, Winfriend Vahland, designated to become the next chief of Volkswagen’s U.S. division, has quit the company, allegedly over differences of opinion over VW’s new U.S. strategy.  Vahland, who served as head of Volkswagen Group’s Skoda unit, was intended to join VW’s brand management as part of the reshuffling after VW Group CEO Martin Winterkorn resigned as the scandal over Volkswagen’s emissions-cheating diesels unfolded.

VW has said that it will recall more than 800,000 SUVs made by its Volkswagen and Porsche brands because their foot pedals could become loose while driving.  The recall affects two of the company’s best-selling SUVs, impacting 409,477 Porsche Cayenne and 391,000 Volkswagen Touareg vehicles.  It also is recalling all 5,561 e-Golf battery-electric cars sold in the U.S. between May 21, 2014, and March 1, 2016, because of faulty battery software that could cause the car to stall and crash, according to a safety recall report filed with the National Highway Traffic Safety Administration.

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