Cars and Drivers

FTC Slaps Volkswagen With Deceptive Advertising Suit

Paul Ausick

Published: March 29, 2016 12:45 pm

Last Updated: January 13, 2020 11:24 am

The U.S. Federal Trade Commission (FTC) on Tuesday filed a complaint in San Francisco federal court alleging that Volkswagen Group of America, the U.S. arm of Volkswagen, deceived consumers in its advertising of its so-called clean diesel vehicles. The alleged deception took place between late 2008 and late 2015.

The FTC wants VW to compensate American consumers who purchased or leased one of the vehicles affected by the company’s diesel emissions cheating scandal. The device that manages the cars’ emissions had been altered to enable the vehicles to emit less during a test than while being driven normally.

According to the FTC’s complaint, more than 550,000 VW diesel-powered vehicles were sold in the United States during that period at an average price of $28,000 per vehicle. The lawsuit covers both VW and Audi vehicles.

The agency seeks a permanent injunction against VW to prevent further violations of the FTC Act and is asking the court to force VW to repay consumers for their losses resulting from violations of the Act, including revoking or rewriting contracts, monetary restitution, refunds and disgorgement of “ill-gotten monies.” Disgorgement alone could cost VW more than 15.4 billion. Refunds and restitution payments could double that.

VW has not yet filed its plan on how it proposes to fix the affected vehicles and a judge recently extended the deadline for that plan until April 21. The U.S. Department of Justice in January filed a lawsuit against VW for violating environmental laws, and that action alone could cost the company as much as $60 billion.

All this is just in the United States. VW sold vehicles equipped with the defeat device all over the world. In Europe the company already has begun its recall and is addressing the problem with a software fix for all vehicles and by installing a device known as a flow transformer in some.