Illinois AG reaches settlement with VW in emissions scandal

By Dawn Geske | Jul 20, 2016

CHICAGO – A settlement has been reached by Illinois Attorney General Lisa Madigan's office over the emissions scandal still engulfing automaker Volkswagen.

The cheating scandal involved Volkswagen Group of America Inc. knowingly falsifying the emissions output of its 2.0 L VW and Audi diesel engine cars sold in the United States. This includes brands such as the VW Jetta, Golf, Beetle, Passat and Audi A3. Diesel engine manufacturers must meet strict emissions regulations set by Environmental Protection Agency, and Volkswagen was found not to be adhering to those regulations.

2016 Volkswagen Passat   Courtesy of Volkswagen

Madigan announced her office had reached a settlement with VW, which could total around $276 million, as part of a multistate settlement. A total of $28.9 million was awarded for violations of the Illinois Consumer Fraud Act and an additional $150 million could be seen in consumer restitution. Illinois is also eligible for $97 million from an environmental settlement involving the U.S. Department of Justice and the EPA.

Noncompliance with the emissions regulations affected 29,800 cars sold in Illinois. These vehicles were sold as environmentally compliant and featured software that cheated the emissions regulations by only working properly when being tested, increasing their emissions of nitrogen oxides in Illinois as well as around the country when the vehicles were operating normally.

Illinois and 49 other states settled with VW as part of a series of state and federal settlements that will provide cash payouts to customers that own the vehicles. The settlement requires VW to buy back or modify the consumers’ vehicles and prohibits VW from performing any unfair or deceptive acts in the future.

Through the consumer program, once approved, VW and Audi owners will receive restitution amounts of $5,100 or more, in addition to the buy-back and vehicle-modification provisions.

“This number could be much larger depending on how many consumers participate,” Eileen Boyce, a spokeswoman for the attorney general’s office in Chicago, told the Cook County Record. “We won’t know until the process is concluded how many people participated. The details are still being finalized on where the money will be distributed.”

Under the consumer program, those who leased vehicles will also receive restitution, allowing them a payout and the ability to terminate their lease without penalty. Vehicles bought after Sept. 18, 2015, when the scandal was disclosed, will receive 50 percent restitution.

The $28.9 million that Illinois will receive is for repeated violation of the state’s consumer protection laws by VW. The company will pay $1,000 per car for violations of the laws, totaling $570 million nationwide.

The $97 million that Illinois is able to seek from the environmental settlement will be used to pay for emissions reduction projects within the state. This is part of $2.7 billion that VW was required to pay as part of a trust to fund environmental programs across the country.

VW will also invest $2 billion in the development of zero-emission vehicles and the infrastructure needed to run them over the next 10 years. Illinois has the right to seek additional penalties from VW for the violations it made with its diesel vehicles in regards to environmental and emissions regulations in the state, Madigan's office said. 

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