US consumers get US$9.8 bil in Volkswagen payoffs

US buyers of polluting Volkswagen AG vehicles received more than US$9.8 bil (RM41.6 bil) in settlements, the Federal Trade Commission (FTC) said today.

Volkswagen agreed to offer to buy back or repair more than 550,000 polluting diesel US vehicles after it admitted in 2015 that it used secret software to cheat emissions tests.

The FTC in its final report on the settlements said more than 86% of consumers completing claims chose to return their car through a buyback or early lease termination rather than get a repair.

Volkswagen paid more than US$9.5 bil to US consumers, while VW diesel supplier Robert Bosch paid more than US$300 mil to US consumers.

Most of the vehicles covered were 2.0-litre diesel vehicles. VW agreed to offer owners and people who leased the 475,000 2.0-litre vehicles between US$5,100 and US$10,000 in compensation, in addition to the estimated value of the vehicle.

The scandal triggered a global backlash against diesel vehicles that so far has cost VW 30 billion euros in fines, penalties, vehicle buyback costs and other settlements.

VW in 2017 pleaded guilty to fraud, obstruction of justice and falsifying statements as part of a US$4.3 bil settlement reached with the US Justice Department.

Last month, a US appeals court ruled VW cannot escape potential financial penalties stemming from suits filed by two counties that may amount to a “staggering” additional liability.

Volkswagen vowed to seek further review by the 9th Circuit or the US Supreme Court if necessary, saying the ruling conflicts with the findings of other courts. – July 28, 2020, Reuters

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