VW Giving $1,000 to Car Owners in Emissions Cheating Scandal

Updated on
Fitch Downgrades VW Credit Rating Over Scandal
  • `Goodwill package' an attempt to regain customers' trust
  • VW says payments won't mean consumers waive right to sue

Volkswagen AG, reeling from an expanding scandal involving diesel cars it has admitted it rigged to pass U.S. pollution tests, announced Monday that owners of the vehicles will receive $1,000 in what the company calls a “goodwill” gesture.

VW is offering owners of diesel-powered cars with 2.0-liter engines under investigation by the U.S. Environmental Protection Agency $500 on a prepaid Visa card. The owners would also get $500 in dealership credits and three years of free roadside assistance.

Volkswagen has been struggling to contain customer anger since the EPA announced the company’s smaller diesel cars since 2009 have technology installed to rig emissions tests. VW dealers have also gotten extra payments and incentives for selling gasoline-powered cars as diesel models can’t be sold. 

“We are working tirelessly to develop an approved remedy for affected vehicles,” Michael Horn, Volkswagen Group of America’s president and chief executive officer, said in an e-mail. “In the meantime, we are providing this goodwill package as a first step towards regaining our customers’ trust.”

Register Online

Consumers who want to sign up for the loyalty program can verify eligibility by going to www.vwdieselinfo.com. Once registered, a goodwill package will be mailed within four weeks, and then customers can pick up payment cards at an authorized dealer.

Two Democratic U.S. senators who have been critical of Volkswagen called the payments “insultingly inadequate.” VW needs to fully cooperate with federal criminal and civil investigations that may provide more redress to taxpayers and car owners, Richard Blumenthal of Connecticut and Edward Markey of Massachusetts said in a statement.

“It should offer every owner who wants to keep her car full compensation for the loss of resale value, fuel economy and other damage caused by its purposeful deception,” the senators said. “The company needs to get serious.”

Consumers don’t need to release any legal claims in order to receive the goodwill package, VW spokeswoman Jeannine Ginivan said.

Fine Print

Robert Hilliard, an attorney representing hundreds of owners of diesel cars covered by the EPA investigation, initially cautioned that consumers signing up for payments should be mindful of any fine print that would require them to resolve any disputes in arbitration and bar them from suing. Hilliard withdrew that warning after a Volkswagen attorney wrote in an e-mail that agreeing to the bank’s terms for the prepaid cards wouldn’t affect any customer claims against Volkswagen.

New York Attorney General Eric Schneiderman said in a statement that Volkswagen’s program appears to be a goodwill gesture and nothing more. Schneiderman is leading a probe by 47 states and the District of Columbia of the Wolfsburg, Germany-based carmaker.

“It in no way diminishes the seriousness of the deceptive practices and environmental harms that are the subject of the states’ investigation, or the determination of the attorneys general of 48 jurisdictions to hold Volkswagen to account for its conduct,” Schneiderman said.

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