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Texas Reaches $50 Million Partial Settlement with Volkswagen

Buyback program for Texas consumers

The State of Texas has reached a partial settlement with Volkswagen concerning the consumer protection lawsuit filed by the state on October 8, 2015. Volkswagen misled Texas consumers by marketing and selling its diesel vehicles as “clean” with knowledge that these vehicles were designed to meet emission standards only when being tested. Outside of the testing station, the vehicles would emit up to 40 times the allowable standard for nitrogen oxides. Volkswagen will compensate defrauded consumers through a buy-back program valued at $10 billion, which has been established to buy back or fix consumer’s vehicles. Volkswagen will establish a $2.7 billion trust fund for projects designed to mitigate environmental harm caused by Volkswagen vehicles’ excess emissions. Under the terms of the mitigation trust agreement, approximately $192 million is allocated for projects in the State of Texas. In addition, Volkswagen has agreed to pay $50 million to the State of Texas in civil penalties and attorneys’ fees for the car company’s violations of the Texas Deceptive Trade Practices Act (DTPA), arising from its deceptive advertising and sale of over-emitting diesel vehicles in Texas.

While the State and Volkswagen have agreed to settle the State’s claims under the DTPA, they have not resolved the State’s penalty claims for Volkswagen’s violations of environmental protection laws, which the State continues to pursue.

“For years, Volkswagen intentionally mislead consumers about the environmental and performance qualities of the vehicles they sold in Texas,” said General Ken Paxton. “When companies willfully violate the public’s trust, we will hold these entities responsible. This settlement will both compensate the victims of Volkswagen’s fraud and punish the company enough to deter future fraud.”

Information provided by Texas AG’s office.

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