VW settlement could return $66M to eligible Hoosiers

June 28, 2016

More than 6,600 Hoosiers who bought certain Volkswagens or Audis designed to defraud diesel emissions tests may receive cash compensation, have their cars bought back or their engines modified. Indiana Attorney General Greg Zoeller announced Tuesday that restitution for eligible Indiana consumers could reach $66 million.

Indiana is among 37 states whose attorneys general settled unfair or deceptive sales practices consumer protection claims against VW. The carmaker is accused of using so-called “defeat devices” in certain 2.0-liter diesel-powered Volkswagen and Audi vehicles.

“Volkswagen deceived customers by misrepresenting its diesel vehicles’ emissions and advertising its cars as meeting ‘green’ and ‘environmentally friendly’ standards,” Zoeller said in a statement. “People paid a premium for a benefit they simply did not receive. In our efforts to protect consumers, attorneys general have ensured Volkswagen will pay for its misrepresentations and compensate its customers to right this wrong.”

Zoeller said under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and nationwide, including 6,638 vehicles in Indiana. Once the consumer program is approved by the court, affected Volkswagen owners will receive a restitution payment of at least $5,100 and a choice between:

• A buyback of the vehicle (based on pre-scandal NADA value); or
• A modification to reduce harmful nitrogen oxide emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve a pollution-control fix. Owners who choose the modification option would also receive an Extended Emission Warranty; and a Lemon Law-type remedy to protect against the possibility that the modification causes subsequent problems.

Volkswagen will contact customers who are eligible for these settlement offerings by mail, the AG’s office said.

Based on 6,638 total eligible Indiana vehicles, Indiana consumer restitution will total between $34 million and $66 million, depending on the value of the respective vehicles. VW will pay this amount in addition to any buyback payments it makes to consumers.

The attorneys generals’ investigation confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States equipped with “defeat device” software and actively concealed the existence of the defeat device from regulators and the public. Volkswagen made false statements to consumers in their marketing and advertising, misrepresenting the cars as being environmentally friendly or “green” and that the cars were compliant with federal and state emissions standards, when in fact Volkswagen knew the vehicles emitted nitrogen oxide at rates many times higher than the law permitted.

Litigation over the 3.0 models will continue.

The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and for consumers who sold their vehicles after September 18, 2015 when the emissions-cheating scandal was disclosed (50 percent of the restitution available to consumers who still own their vehicle).

Additional components of the settlements include:

• Environmental mitigation fund: Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of NOx. This fund, also subject to court approval, is intended to mitigate the total, lifetime excess NOx emissions from the 2.0-liter diesel vehicles. Indiana is eligible to receive $38,920,039 to fund mitigation projects.
• Additional payment to the states: In addition to consumer restitution, Volkswagen will pay to the states more than $1,000 per car for repeated violations of state consumer protection laws, amounting to $520 million nationwide.  This amount includes $6,571,620 paid for affected vehicles Volkswagen sold and leased in Indiana.   
• Zero-emission vehicles: Volkswagen has committed to investing $2 billion over the next 10 years for the development of non-polluting cars, or zero emission vehicles (ZEV), and supporting infrastructure.
Volkswagen will also pay $20 million to the states for their costs in investigating this matter and to establish a fund that state attorneys general can utilize for future training and initiatives, including investigations concerning emissions violations, automobile compliance, and consumer protection.  

The full details of the consumer program will be available online at www.vwcourtsettlement.com and www.ftc.gov/VWSettlement.


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