• FTC is coordinating with the Justice Department and the EPA
  • Agency has the authority to seek refunds for car owners

Volkswagen AG is under investigation by the U.S. Federal Trade Commission for advertising claims for cars that were marketed as “clean diesels,” but were actually rigged to pass pollution tests.

Justin Cole, a spokesman for the agency, said the FTC is coordinating with the Justice Department and the Environmental Protection Agency, which opened their own formal investigations into the carmaker last month.

"We have been cooperating with all of the agencies that have come to us," said Jeannine Ginivan, a spokeswoman for Volkswagen. She added that she couldn’t comment on any specific investigation.

Volkswagen installed software on around 11 million diesel vehicles over seven years to make the cars appear to pass emissions tests. Some 500,000 of those cars are in the U.S. The software switched off emissions controls on the road to improve performance, generating pollution at levels as much as 40 times the U.S. limit. The company is delaying or canceling non-essential projects to limit spending after determining that the 6.5 billion euros ($7.4 billion) set aside to address the scandal won’t be enough.

In addition to government investigations in the U.S., Germany and other countries, Volkswagen faces more than 280 class-action lawsuits and some of its executives may face charges.

Senator Bill Nelson, a Democrat from Florida, wrote to Commission Chairwoman Edith Ramirez in September, calling for a probe and asking the FTC to force the carmaker to run a marketing campaign to inform consumers about the deception.

The FTC has authority to investigate unfair and deceptive practices by companies against consumers and generally seeks refunds on their behalf. The investigation was reported earlier by Politico.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE