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FTC sues Volkswagen over diesel ads

News, 30 March 2016

WASHINGTON, DC: The Federal Trade Commission has accused Volkswagen of "deceiving" consumers by running ads touting the eco-friendly credentials of diesel vehicles later revealed to break emissions regulations.

The FTC is seeking a court order against Volkswagen Group of America regarding ads for "clean diesel" cars, sold under the VW and Audi banners, which were fitted with "emission defeat devices" to illegally mask high emissions during government tests.

More specifically, the consumer watchdog wants VW to compensate any American customer who acquired or leased an affected vehicle between late-2008 and late-2015.

Its complaint, filed in a federal court, suggested that more than 550,000 cars subject to "false claims" about emissions fell into this category, with an average sales price of around $28,000.

"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," Edith Ramirez, the FTC's Chairwoman, said.

"Our lawsuit seeks compensation for the consumers who bought affected cars based on Volkswagen's deceptive and unfair practices."

The marketing efforts flagged up by the government body included Super Bowl spots, print ads and social-media communications, many of which were aimed at "environmentally-conscious" shoppers.

"It was very emotionally appealing campaign," Rebecca Lindland, an analyst at Kelley Blue Book, told USA Today in assessing VW's "clean" car messaging.

"You felt like you were a good human being, it made you feel better about buying a diesel and it also made you feel like you were buying the latest technology."

Some marketing materials, according to the FTC, claimed "clean diesel" cars cut nitrogen oxides emissions by 90%, whereas the actual figure exceeded legal limits by as much as 4,000%.

Among other false claims were that cars met "stringent emission requirements" – a status only achieved because of "illegally installed software".

Similarly, while brand communications emphasised the potentially resilient resale value of these vehicles, the fact emissions levels are so high means the opposite is much more likely to be true.

"Volkswagen has received the complaint and continues to cooperate with all relevant US regulators, including the Federal Trade Commission," a VW spokesperson said.

"Our most important priority is to find a solution to the diesel emissions matter and earn back the trust of our customers and dealers as we build a better company."

Data sourced from FTC/USA Today; additional content by Warc staff