AG Fox Announces Compensation for Montana Consumers Under Settlements with VW Over Emissions Fraud
Attorney General Tim Fox today announced a settlement requiring Volkswagen to pay more than $570 million for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing diesel vehicles equipped with illegal and undisclosed defeat device software. This agreement is part of a series of state and federal settlements that will provide cash payments to affected consumers, require Volkswagen to buy back or modify certain VW and Audi 2.0-liter diesel vehicles, and prohibits Volkswagen from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers and regulators.
These recent coordinated settlements resolve consumer protection claims raised by a multistate coalition of State Attorneys General co-led by attorneys general in Connecticut, Massachusetts, New York, Oregon, Tennessee, and Washington, and joined by many other states and jurisdictions against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. – collectively referred to as Volkswagen. They also resolve actions against Volkswagen brought by the United States Environmental Protection Agency (EPA) and Department of Justice (DOJ), the Federal Trade Commission (FTC), California and car owners in private class action suits.
“These proposed settlements are welcome news for the nearly 2,800 Montanans registered as owning or leasing vehicles affected by Volkswagen’s emissions fraud,” said Attorney General Tim Fox. “While the court has not yet approved the settlements, this is a good time for owners or lessees of the affected vehicles to begin to educate themselves which option is right for them — either a buy-back of the vehicle or a fix to reduce emissions,” Attorney General Fox advised. “I’m pleased that after months of uncertainty for Montana’s Volkswagen diesel customers, we’ll be able to make sure both they and our environment are protected to the fullest extent possible.”
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 intended to circumvent applicable emissions standards for certain air pollutants, 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 environmentally friendly or “green” and that the cars were compliant with federal and state emissions standards, when, in fact, Volkswagen knew the vehicles emitted harmful oxides of nitrogen (NOx) at rates many times higher than the law permitted.
Under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model year 2009 through 2015 listed in the chart below at a maximum cost of around $10 billion.
Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 and a choice between:
• A buy back of the vehicle (based on pre-scandal NADA value); or
• A modification to reduce NOx 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 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.
The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option). Further, consumers who sold their vehicles after September 18, 2015 will receive 50 percent of the restitution available to consumers who still own their vehicles. Additional components of today’s 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 identified below. Under the terms of the mitigation trust, Montana will be eligible to receive approximately $11,600,000 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 $570 million nationwide. This amount includes over $2,000,000 paid for affected vehicles Volkswagen sold and leased in Montana.
• 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.
• Preservation of Environmental Claims: This settlement by state attorneys general preserves all claims under state environmental laws, and the State of Montana maintains the right to seek additional penalties from Volkswagen for its violations of environmental and emissions laws and regulations.
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.
Montana consumers who have questions about the proposed settlement may also call the Office of Consumer Protection at the Montana Department of Justice at 1-(800) 481-6896 toll-free within the state, or send an email to [email protected].
2.0 Liter Diesel Models
EPA Test Group Vehicle Make and Model(s)
9VWXV02.0U5N VW Jetta, VW Jetta Sportwagen
2010 AVWXV02.0U5N VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2011 BVWXV02.0U5N VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2012 CVWXV02.0U5N VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2013 DVWXV02.0U5N VW Beetle, VW Beetle Convertible, VW Golf, VW Jetta, VW Jetta Sportwagen, Audi A3
2014 EVWXV02.0U5N VW Beetle, VW Beetle Convertible, VW Golf, VW Jetta, VW Jetta Sportwagen
2014 CVWXV02.0U4S DVWXV02.0U4S EVWXV02.0U4S VW Passat
2015 FVGAV02.0VAL VW Beetle, VW Beetle Convertible, VW Golf, VW Golf Sportwagen, VW Jetta, VW Passat, Audi A3