VW to give up to US$1,000 payments to polluting diesel owners in Vermont, Arizona

A worker shines the grill of a Volkswagen car displayed on media day at the Paris auto show. September 30, 2016. — Reuters pic
A worker shines the grill of a Volkswagen car displayed on media day at the Paris auto show. September 30, 2016. — Reuters pic

WASHINGTON, June 13 — Volkswagen AG is paying owners of polluting diesel-powered vehicles up to US$1,000 in additional payments to settle state lawsuits in Vermont, the state’s attorney general said today.

VW agreed to a US$6.5 million settlement with Vermont to resolve allegations of false advertising claims. Under the settlement, VW agreed to pay owners in the state up to US$1,000 each for vehicles covered under the settlement.

Vermont and Arizona, which settled similar claims last month, are the only two states in which consumers will receive restitution payments as a result of a state enforcement action. Under court settlements, VW owners previously received between US$5,100 and US$17,000 in compensation for having polluting vehicles fixed or selling them back to the automaker.

In 2016, VW reached a US$603 million consumer fraud settlement with 44 US states. Since then it has struck settlements with five other states – including Vermont – worth more than US$120 million. The only state with a pending consumer fraud action is New Mexico.

“Vermonters expect and deserve truth in advertising — especially when it comes to making decisions involving environmental impacts,” said Attorney General Thomas Donovan.

Vermont owners will receive a total of US$2.9 million in direct consumer restitution and VW will also pay US$3.6 million into the state’s general fund.

In the Arizona settlement announced in May, VW agreed to pay US$10.5 million for direct consumer payments and US$20 million into the state’s general fund, to be used toward its education funding shortage.

Arizona Attorney General Mark Brnovich said if the state had joined the 2016 multistate agreement, it would have received only US$11 million.

In total, VW has agreed to pay more than US$25 billion in the United States for claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting US vehicles. The buy-backs will continue through the end of 2019.

VW admitted in September 2015 to secretly installing software in nearly 500,000 US cars to cheat exhaust emissions tests. The vehicles emitted up to 40 times the legally allowable pollutants.

In May, federal prosecutors in Detroit unsealed criminal charges against former VW CEO Martin Winterkorn. Two other former VW employees have pleaded guilty in the investigation and nine people in total have been charged.

Volkswagen AG has paid more than US$7.4 billion to buy back about 350,000 US diesel vehicles through mid-February, court filings show. — Reuters

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