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Two U.S. Senators are accusing Volkswagen of insulting American consumers with a $1,000 “goodwill” gift card offer, after admitting it charged them thousands of dollars for “Clean Diesel” vehicles that are actually not environmentally friendly at all and contained software designed to cheat on federal emissions tests.
A Volkswagen diesel vehicle recall has affected nearly 500,000 Volkswagen and Audi TDI diesel vehicles sold in the United States, after the U.S. Environmental Protection Agency (EPA) discovered that the vehicles have “defeat device” software, which reduced emissions levels during testing. However, during normal operations, the vehicles emit excessive amounts of pollution.
On Monday, the German auto manufacturer offered $1,000 and roadside assistance to U.S. customers in what the company called a goodwill package.
U.S. Senators Richard Blumenthal and Edward J. Markey, from Connecticut and Massachusetts, respectively, issued a blistering statement on Monday, critical of Volkswagen’s gift card offer.
“This offer is an insultingly inadequate amount — a fig leaf attempting to hide the true depths of Volkswagen’s deception,” the senators said in the statement. “Perhaps more egregiously, the company may ask owners to sign away their right to legal action and just compensation. Volkswagen should offer every owner a buy-back option. The company should state clearly and unequivocally that every owner has the right to sue.”
In addition, the senators said Volkswagen should compensate every owner who wants to keep the recalled vehicle full compensation for the loss of resale value, as well as compensation for loss of fuel economy and any other damages.
The goodwill package includes a $500 prepaid Visa Loyalty Card, a $500 Volkswagen Dealership Card, as well as three years of 24-hour roadside assistance for affected TDI vehicles. Affected consumers have until April 30, 2016 to apply to take part in the program.
However, the offer has raised both questions and ire, with some worrying that accepting the money may negate the ability of owners to file lawsuits against Volkswagen over the diesel engines or be eligible for any future settlements.
Volkswagen officials say that accepting the $1,000 goodwill package does not negate the ability to file a lawsuit, but some attorneys are warning consumers to be wary.
The Volkswagen emissions scandal began in September, when it was discovered that smaller Volkswagen and Audi “Clean Diesel” vehicles sold in recent years had similar software installed, leading to a recall for VW Beetle, VW Golf, VW Jetta, VW Passat and Audi A3 vehicles sold in various model years between 2009 and 2015. Almost 500,000 of the originally recalled vehicles were sold in the United States.
Volkswagen marketed the vehicles as “clean diesel”, which were promoted as being better for the environment and providing better gas mileage. However, the statements appear to be part of a major fraud on consumers who were trying to be more environmentally friendly.
Last week, the list of affected TDI diesel vehicles was expanded to include the 2014 VW Touareg, the 2015 Porsche Cayenne, and the 2016 Audi A6 Quatro, A8, A8L, and Q5. However, VW has denied the EPA’s claims that those vehicles are affected and their owners are not part of the goodwill package offer.
The EPA has said that Volkswagen could face as much as $18 billion in fines for violating Clean Air Act emissions testing laws. A number of vehicle owners are already pursuing lawsuits in court, seeking compensation for premiums paid for the “Clean Diesel” cars, as well as substantial drops in resale value. Many vehicle owners also allege that Volkswagen should be forced to buyback the vehicles outright, would cost the automaker billions more.
As the lawsuits continues to mount, the U.S. Judicial Panel on Multidistrict Litigation will hear oral arguments on December 3 about whether to centralize the claims before one federal judge for coordinated pretrial proceedings, as part of an MDL or multidistrict litigation.