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Texas Personal Injury News

Sunday, April 17, 2016

Volkswagen Facing Deceptive Practice Claims by the FTC

What is the fallout from VW's diesel emission controversy?

As has been widely reported, Volkswagen Group was found to have rigged its line of diesel vehicles with computer software designed to cheat emissions tests. The German automaker has been the target of a criminal investigation, as well as a wave of lawsuits. Now, the Federal Trade Commission is also on the case having accused VW of deceptive practices for falsely advertising its diesel vehicles' significantly reduced emissions.

Deceptive and Unfair Practices

The FTC has enforcement authority to protect consumers from deceptive and unfair practices. These practices include misrepresentation, false advertising and other deceptive, fraudulent or unethical methods utilized to obtain business. The Commission filed a civil complaint against the automaker in the U.S. District Court in California.  The court is also handling a consolidated litigation from consumers seeking financial damages. In addition to permanent injunctive relief, rescission, restitution and disgorgement of ill-gotten gains, the FTC is said to be seeking $15 billion in damages.

"Our lawsuit seeks compensation for the consumers who bought affected cars based on Volkswagen’s deceptive and unfair practices," FTC Chairwoman Edith Ramirez said in a statement.

If the agency prevails, this has the potential to be one of the largest false advertising cases in history.

This comes after the company has set aside billions to pay for repair costs of about 11 million cars sold around the world. The question remains, however, as to whether the diesel-spewing vehicles can be repaired. If not, Volkswagen may be forced to buy some of the cars back, and the company could be hit with billions more in fines and settlements arising from the diesel-rigging scandal.

VW's False Advertising

Volkswagen's TV commercials, advertisements and other marketing materials pitched the cars as so-called "clean diesel" vehicles. The models involved were sold between 2009 and 2015 and the automaker's marketing strategy highlighted how the cars were eco-friendly and reduced nitrogen oxide emissions by up to 90 percent. This claim proved to be totally false, as tests revealed the diesel cars' emissions were as much as 40 times greater than permissible U.S. standards.

"For years, Volkswagen's ads touted the company's 'clean diesel' cars even though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests," said Ramirez.

While it is unclear whether or not the FTC will prevail, this case adds to Volkswagen's woes stemming from the emissions-rigging scandal.  It also highlights how consumers can be harmed by deceptive and unfair business practices, some of which may not occur on as large a scale as the VW caper. If you are a consumer who has been the target of a deceptive practice, you should engage the services of an attorney with expertise in consumer law.


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