A federal lawsuit has been initiated against Volkswagen. The suit was filed on Tuesday and it charges the automaker with making false advertising claims about its “Clean Diesel” technology. Allegedly, the automaker falsely stated that the technology was environmentally friendly, when in fact it was not.
Last year, Volkswagen admitted that it installed illegal computer software in its vehicles so they would cheat emission tests. In fact, the cars were billowing out 40 times the amount of air pollutants that are legally permitted in normal driving conditions. According to the Federal Trade Commission, Volkswagen lied to its customers, and sold over 550,000 diesel vehicles via its fraudulent claims, which included high profile television commercials, social media ads and print advertising.
The ads were targeted toward environmentally conscious customers, but — as it turned out — the diesel smoke belching cars were not a good a match for this demographic in the least. Now, Volkswagen is facing over $20 billion worth of possible fines from United States regulators. The automaker is also facing a lawsuit from institutional investors in Canada and a number of other counties to the tune of $4.8 billion Cdn, to the company’s bad handling of the emission scandal, which caused the automaker’s share price to fall by approximately 33 percent.
The civil litigation being brought against Volkswagen could significantly impact the carmaker’s profitability in the coming years. However, it will remain to be seen if the company will actually be forced to pay these claims of billions of dollars in full. Normally, such business litigation cases will conclude with an out of court settlement.
Source: cbc.ca, “Volkswagen sued for false advertising over ‘Clean Diesel’ claims,” March 29, 2016