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VW Now Facing North of $60 Billion In U.S. Fines for Emissions Cheat

The FTC sued Volkswagen Tuesday for what could end up being $15 billion in fines.

GettyImages-498673694
GettyImages-498673694

The Environmental Protection Agency and the Justice Department aren’t the only arms of the U.S. government with Volkswagen in their crosshairs.

On Tuesday, the Federal Trade Commission sued the iconic German carmaker, for what could end up being $15 billion in fines, for false advertising. The company is already facing potential fines of up to $46 billion for installing software into its diesel cars that allowed them to beat American emissions tests, and has also been sued by 278 global institutional investors in the company for $3.7 billion.

According to the FTC charges, filed in a California federal court Tuesday, the company misled consumers when it advertised its clean diesel vehicles as having low emissions, that they complied with U.S. emissions standards and were environmentally friendly, and that this could give them a high resale value. Volkswagen has admitted it installed the emissions bypass on cars purchased by about 550,000 buyers.

The Environmental Protection Agency and the Justice Department aren’t the only arms of the U.S. government with Volkswagen in their crosshairs.

On Tuesday, the Federal Trade Commission sued the iconic German carmaker, for what could end up being $15 billion in fines, for false advertising. The company is already facing potential fines of up to $46 billion for installing software into its diesel cars that allowed them to beat American emissions tests, and has also been sued by 278 global institutional investors in the company for $3.7 billion.

According to the FTC charges, filed in a California federal court Tuesday, the company misled consumers when it advertised its clean diesel vehicles as having low emissions, that they complied with U.S. emissions standards and were environmentally friendly, and that this could give them a high resale value. Volkswagen has admitted it installed the emissions bypass on cars purchased by about 550,000 buyers.

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

Volkswagen touted the benefits of clean diesel in commercials like the one below:

https://www.youtube.com/watch?v=WNS2nvkjARk

In a statement, Volkswagen said it “continues to cooperate with all relevant U.S. regulators” and that the company’s “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.”

Tuesday’s lawsuit is another blow to the company, which has been reeling since it admitted to the cheating in September of last year. Last month, it reported sales fell 13.2 percent from a year ago. Sales of the Passat, made in Tennessee, were down more than 30 percent. It’s also been a blow to Germany’s national brand, which long represented manufacturing quality.

It also comes during an embarrassing run for VW. Last week it announced that it would recall 800,000 sport-utility vehicles made by Volkswagen and its Porsche subsidiary over an issue with a loose pedal. This affects two of the company’s best-selling SUVs: 409,477 Porsche Cayenne and 391,000 Volkswagen Touareg vehicles.

The company also announced Monday that it was recalling all 5,561 e-Golf battery-electric cars sold in the U.S. between May 21, 2014, and March 1, 2016. The reason? Faulty battery software could cause the car to crash.

Photo credit: SEAN GALLUP/Getty Images

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