Volkswagen Sued for Deceiving Consumers with “Clean Diesel” Ad Campaign

Federal Trade Commission v. Volkswagen Group of America, Inc., No. 3:16-cv-01534 (N.D. Cal. March 29, 2016)

The FTC’s suit seeks to compensate consumers who bought affected cars based on Volkswagen’s alleged deceptive and unfair advertising practices. The Commission alleges that, between 2008 and 2015, Volkswagen sold or leased more than 550,000 diesel-fueled cars in the United States under allegedly false claims that the cars were low-emission, environmentally-friendly cars that met emissions standards and would maintain a high resale value. The campaign materials claimed that, for example, vehicles reduce nitrogen oxide emissions by 90% when, in fact, the complaint alleges they emit up to 4000% more than the legal limit of nitrogen oxides. The complaint further alleges that the hidden defeat devices would significantly reduce the vehicles’ resale value. The selling price for the cars ranged from $22,000 to $125,000, with an average price of approximately $28,000.

Volkswagen also allegedly provided the means and instrumentalities for others to deceive consumers by distributing advertisements and promotional materials, including videos, webpages, brochures, and point of sale materials to dealers and independent distributors.

The FTC seeks a court order requiring Volkswagen to compensate American consumers who bought or leased an affected vehicle, manufactured between late 2008 and late 2015. The Commission also seeks an injunction to prevent Volkswagen from engaging in this type of conduct in the future. The complaint can be viewed here.

Takeaway: The case illustrates the importance of having sufficient substantiation to support advertising claims, especially when claiming that a product or service is “green”.

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