Volkswagen is set to pay €830 million in compensation to Germans who have bought a car fitted with emissions test-duping technology. A top consumer protection group said the offer is “not generous” and is a fraction of what US drivers were awarded.
Verbraucherzentrale Bundesverband, a consumer group, announced on Friday (28 February) that a collective settlement has been reached with the automaker, meaning 260,000 consumers affected by Dieselgate are now entitled to compensation.
In September 2015, the United States Environmental Protection Agency discovered that Volkswagen had installed so-called cheat devices on certain models, in an attempt to game emissions test. The practice was later found to have been carried out across the world.
VW has now agreed to pay between €1,350 and €6,257 to each German driver that has subscribed to a collective case, depending on the age and model of their cars. Legal advice is included in the settlement offer, which was finalised after independent auditors gave the green light.
“Consumers affected now have a real choice: They can either accept the settlement and rely on receiving money quickly. Or they can reject the offer,” VZBV said in a statement. The case will go ahead if fewer than 30% of the plaintiffs reject it.
Only drivers who bought their car after 31 December 2015, once the scandal was revealed, are eligible for compensation. Consumers must also have been legally residing in Germany at the time of the purchase.
“VZBV fought for more. But in the context of the difficult negotiations, the result is the maximum that was achievable,” insisted Klaus Müller, the group’s executive director.
Müller added that “the offer is not generous but it lies within the amounts that were granted so far in settlements reached in the context of individual claims in front of German courts”.
Made in America is better
In 2016, VW agreed to pay nearly $15 billion in compensation under a deal with the US government. American drivers were entitled to the full pre-scandal value of their cars plus a $10,000 damages pay-out.
The Wolfsburg-based carmaker also had to pay more than $2 billion to fund clean air programmes and environmental initiatives. It has paid a similar amount in euros in Germany-based fines.
Disgruntled German motorists will have until 20 April to accept or reject the collective offer. VW insisted on the tight deadline because Germany’s Federal Court will start deciding on 5 May if individual compensation claims for damages have a legal basis.
“Consumers have the right to file an individual claim. But they will then have to take a certain risk. Those who would like to take less risk can accept the settlement offer”, Klaus Müller added.
Volkswagen’s recent heavy forays into the electric car market are a result of the Dieselgate hangover, as the carmaker strives to regain consumer trust. Its initiatives range from increasing sales targets to converting entire factories to produce just EVs.
[Edited by Zoran Radosavljevic]